Pandemic brings NA tourism tax down but retail sales up slightly

The coronavirus pandemic has affected New Albany city tax revenue, but not as much as some feared.

Mayor Tim Kent said the tourism tax collected in March, the first month of mass closings, was $57,430, a 30-percent decrease from the same month a year ago and $25,547 less than March 2019. (The first COVID-19 case in the state was reported March 11)

The tourism tax is two percent collected on lodging and all food that is prepared on site. Thirty percent is about how much a sampling or restaurant managers thought their business would be down for the month when businesses first closed. That estimate was obviously pretty accurate.

That’s the bad news.

The better news is that retail sales tax revenue is up slightly, about .97 percent. That’s an increase from $312,135 a year ago to $315,168 this year.

The state collects seven percent tax on all retail sales and returns 18.5 percent of that back to cities.

Even though many businesses were closed or their services curtailed, as in the case of restaurants, the increased sales at grocery and big-box stores more than compensated.

Officials hope that the tourism tax for April will be up as more restaurants opened with curbside service. They added that the tourism drop is not yet critical.

Reporting sales and tourism tax remains a couple of months behind. The tax collected in month one is reported to the state in month two and reimbursed to the cities in month three. April results won’t be ready for another month.

Retail sales tax is the city’s main source of revenue with tourism bringing a substantial amount as well.

For the time being, Mayor Tim Kent said the current pandemic-related protection orders remain in place for the city.

“The city and county are trying to stay on the same page and follow the governor’s lead,” he said.

Kent said city services continue to function well, although the street department has been nearly overwhelmed by the amount of trash placed out on streets. With so many people at home, many have decided to take the time to do home maintenance, cleaning or construction work.

“They’re wearing out the street department,” Kent said. “Trucks are running every week – when they can. Sometimes they just have to come back later.”

The solid-waste routes remain unchanged (although the schedule will be different next week due to Memorial Day when the Monday route will be picked up Tuesday and the Tuesday route, Wednesday).

Churches continue to be problematic as far as the governor’s social distancing order is concerned.

Kent said while they urge people to stay home or use social distancing, they can’t effectively prohibit the churches from having in-person services. Some churches have been holding services with some using spacing and protective measures, but perhaps not all.

The biggest problem for the city is the three largest churches, which have hundreds of members.

Kent said First Baptist Church is considering starting a plan next month that will divide the congregation into three groups alphabetically and holding three separate services. “That way they can space them out,” he said. “Of course families can sit together since they are together anyway.”

Kent said that although churches can do what they want, they need to remember that they may be civilly liable if someone gets sick or dies as a result of attending a service.

City offices are still locked and anyone who needs in-person services is asked to call ahead to arrange that. The only bottleneck reported is trying to pay utility bills at the drive-up window at the light, gas and water office on Cleveland Street where cars sometimes are lined up in the street. On days when a high number of payments is expected, the drive-up window in the former Fred’s building is open to accept utility payments.

Incidentally, Kent said architect Ross Barkley has been given the go-ahead to begin design work on renovating the Fred’s building for use by the light, gas and water and police departments. Work also will be done on the WIC building on Carter Avenue, purchased by the city for use as a boardroom and municipal courtroom. Some renovation will be done as well on the auto sales building at the former livestock sale barn on East Bankhead Street, which the city also owns.

Upon learning that county supervisors have cancelled the Union County Fair, Kent said although the board has not discussed it, they may eventually need to cancel the Freedom Celebration or even the Tallahatchie RiverFest. It is still too soon to tell. Also, it was not clear whether the farmers’ market, which usually starts in early June, will be held.

Aldermen are not scheduled to meet again until the regular monthly meeting June 2.