Denison sees 2nd month of sales tax increase amid COVID-19
As cities across the state saw sales taxes dwindle in April, during the height of the COVID-19 pandemic, the city of Denison recorded an increase in revenues.
For the month of April, the city saw its sales tax revenues increase by just under 8 percent in April 2019. This marks the second month in a row that Denison has seen revenues increase amid COVID-19 following a 3.2 percent increase in March.
“We were very pleased to see the positive number from April,” City Manager Jud Rex said Thursday. “We had obviously projected a decrease, but we are very pleased with a nearly 8 percent sales tax collection increase for April.”
The update on Denison’s sales tax revenue comes in month that many cities anticipated significant losses in revenue. Unlike March, many businesses remained closed or had reduced capacity in response to the pandemic.
Rex said the city only has initial numbers for April’s revenues and is requesting a more detailed report that will break these down in more detail.
However, Rex said in general businesses in Denison learned to adapt. Through its March numbers, Rex said the city saw a significant increase in its online sales taxes. This indicates that many businesses adopted an online model when physical storefronts were not open.
“Our businesses in the downtown area got extremely creative when the executive orders came across,” he said. “As soon as the orders came out that certain businesses had to close, our businesses started innovating and did a whole lot of curbside and took to the internet to keep their sales going.”
In March, Rex said restaurants played a big part in Denison’s numbers. This was especially true for those who adopted an active curbside or delivery model, he said. March also had an anomaly in its sales tax numbers as a major heavy equipment purchase helped put the city in the black.
With the closures, Rex said he expected April to be a indicator of the significance of the economic impact the pandemic would have on the city.
“We really expected April to be our low point for sales tax revenues and I think we are seeing that is not the case, or that our decline in sales tax may not be as steep as we thought,” he said. “We are trying to be optimistic and hope we’ve seen the bottom and things will improve.”
Despite this, Rex said the city is proceeding cautiously and not celebrating too early. The more detailed reports could show that there were back payments that impacted April’s numbers.
Additionally, Rex said the $1,200 assistance check issued to citizens could also have played an impact in the numbers and artificially inflated them.
“We are still remaining cautious. Unemployment is still high and the state of the national economy is still in flux,” he said. “The big question is that the government pumped large quantities of money into the economy during this pandemic.So could these sales numbers really be inflated and we just pushed off that worst month down the road?”
The April numbers come a few weeks before the city’s annual budget retreat. While the event usually focuses on the next fiscal year, Rex anticipates that the 2019-2020 fiscal year will be a major talking point this year.
“We usually don’t spend much time talking about the current year and instead focus on the future, but at this point we are going to spend time on how the city looks through 2020.
Michael Hutchins is the local government reporter for the Herald Democrat. He can be reached at email@example.com.