FAIRHOPE – City revenues are picking up after slowing down when the COVID-19 outbreak began earlier this year, Fairhope officials said at a recent budget discussion.
Sales tax revenue was up 2.77 percent from the year before, Kim Creech, Fairhope city treasurer, said on Sept. 28.
“With having COVID-19, the city of Fairhope was very fortunate to have some grocery stores here,” Creech said. “People even though they couldn’t go to the restaurants, you could tell they continued to spend money in areas that still need it.”
The city’s proposed budget is $30.91 million. The previous budget passed in November 2019 was about $29.78 million.
Council President Jack Burrell said income is still uncertain during the coronavirus pandemic and the recovery from Hurricane Sally and he would like to see the budget reduced to about $30.51 million.
“It looks pretty good,” Burrell said. “We did pretty good despite COVID-19 and a hurricane. We don’t know exactly how we’re going to be impacted by the hurricane just yet. It could be that you have a building boom, reconstruction and a lot of money, lot of insurance money flows in and it could be people are strapped for cash because of lost jobs due to COVID. I still like the conservative approach.”
Burrell said some income estimates in the 2019-2020 budget were more than the city received. He said Fairhope should be careful about projections under the current circumstances.
“We don’t know what’s going to happen this winter or this fall with COVID-19,” Burrell said. “If we get some big outbreak and things get shut down, that’s the concern for me and I’m worried about those lingering effects and would really like to be conservative on these revenues. We can always change them. We can always go back and revise them upwards. Pretty hard to revise them downward once we get into the fiscal year.”
Creech said one benefit in recent months was the increase in online sales tax. Under the Sellers Use Tax regulations, companies that sell items online to Alabama buyers have to pay taxes to the state. Those taxes are then divided between the state and cities, she said.
In Fairhope, online sales taxes increased 108 percent, from $282,000 to $588,000, Creech said.
She said property tax income, which is set by the Baldwin County Revenue Commissioner’s Office, will also increase.
One area where city revenue dropped was in lodging tax collections.
“During COVID-19, this was the area where the city of Fairhope and many cities, took the hit was lodging tax,” Creech said. “Ending for the year was cash basis we are down 15.51 percent in lodging tax. We were really doing good up until COVID-19 hit. Our economy was really doing well.”