By Margo Wagner | [email protected]
Alexandria City Council received the monthly financial report for May at its July 7 public hearing. The report showed a significant decrease in transient lodging and meals tax revenue, but the decrease in revenue was not as severe as staff had expected.
“This is one of the first reports that gives us a sense of what we are actually seeing with consumption-based revenue collection as we continue our fight against COVID-19,” Mayor Justin Wilson said.
Kendel Taylor, the Alexandria director of finance, explained that this report reflects sales tax revenue from March and transient lodging and meals tax from April because of the lag in consumer tax reports.
City staff expected to see a decline in revenue both because of the pandemic and the decision to offer a moratorium on penalties and interest for transient lodging, meals and emissions tax in early spring.
However, despite the decrease in revenue for some categories, sales tax revenue remained the same at approximately $2.5 million.
“Consumer spending has not been as abysmal as we thought it was going to be,” Taylor said.
Taylor stated that economists are currently trying to determine how deep the economic decline is going to be and how long recovery will take. According to Taylor, Alexandria was fortunate to begin the pandemic in a really strong place revenue-wise.
“That’s where the good news ends,” Taylor said.
Meals tax revenue decreased from $2.2 million in 2019 to $600,000 in 2020, and transient lodging tax revenue decreased from $1.3 million in 2019 to under $100,000 in 2020. Fortunately, according to Taylor, home sales and real estate taxes did not change due to COVID-19 and the city is on par with last year’s numbers.
Council plans to watch the monthly consumer reports closely for the rest of the year and advocate for more financial support at the state and federal level.