Tuscaloosa Mayor's Revenue Report Highlights Recovery From Pandemic

TUSCALOOSA, AL — Tuscaloosa Mayor Walt Maddox on Tuesday presented his annual revenue report to the City Council's Finance Committee, with city officials viewing the numbers as indicative of commendable economic recovery from the ongoing COVID-19 pandemic.

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Key takeaways

*numbers are from October 2021 through February 2022.

• In terms of major revenues for the city's General Fund, the city is at 64% of budget for the current fiscal year, with $82,142,470 collected since October.
• The City of Tuscaloosa's sales tax collections are currently at 46% of budget as of the latest data, as the city is 42% through the fiscal year. In November 2021, for instance, the city collected $866,556.45 more than it did the same month during the previous year.
• Director of Budgets and Strategic Planning Becky Scheeff told Patch her projections for sales tax collections for the year are between $1.5 million and $2 million if the city stays on the same track it's on now. "For sales tax, I would say we're definitely meeting expectations," she said. "If you look year over year, we've exceeded last year. Every month we exceed prior year. I would say we definitely expect to be over budget on sales tax by the end of the year."
• Property tax revenues, which normally are collected in the first quarter of the fiscal year, are at 105% of budget right now. Maddox expects the city to finish $1.1 million above budget for this line item. In November 2021, for example, the city collected $1,737,623.20 more in property taxes than the same month during the previous fiscal year.
• For Elevate Tuscaloosa — the city's 1 cent sales tax — Tuscaloosa has collected $9,422,823 in sales taxes for the fiscal year to date, which represents 46% of budget. While sales taxes make up 90% of the Elevate budget, the remaining 10% consists of use tax, with the city currently at 49% of budget.
• Mayor Walt Maddox on Elevate: "Our collections were about $200,000 higher, so we continue to forecast outstanding growth within the Elevate Tuscaloosa fund as it mirrors what we see on the sales tax and again on the use tax, so we're ahead of budget projections."
• Scheeff was quick to point out the driver for revenue increases, particularly with sales tax, was due to inflation. "Inflation over the past year has definitely resulted in increases in revenue, especially for sales tax," she said.

Click here to view the full presentation.

Cause for Optimism

During his presentation on Tuesday, Maddox pointed out the recovery seen for the city's hotels, as tourism for the city has returned to levels reported prior to the COVID-19 pandemic.

Indeed, October and November 2021 — which saw UA host five home football games — were boons for the local tourism economy, with the city seeing lodging tax collections increase from the previous year by 84% and 124%, respectively.

"The big thing to highlight on lodging taxes is how much we have recovered since COVID," Scheeff said. "If you look at the prior year, you can see just how bad it was during COVID, so I think the big thing there is how much our lodging taxes have recovered."

Maddox said with no substantial growth in lodging tax revenue expected for the rest of the fiscal year, the city expects to have a surplus of $1.1 million.

"Lodging tax continues to be impressive," he said. "I know leaving Friday night from the office, it was packed downtown for graduation weekend."

One economic side effect from the COVID-19 pandemic was the tidal shift toward online shopping for many, with the benefits reflected in the city's Simplified Sellers Use Tax (SSUT) — otherwise referred to as its internet sales tax.

"We're at 55% currently of budget, so we look really good there," Scheeff said. "SSUT kind of spiked a little bit during COVID, which is expected because a lot of people bought stuff online and just kind of continued on that track. I think we're expecting a half of a million dollars in surplus."

Scheeff then said revenue generated by business licenses is another reason for optimism, as the city has exceeded its budget before reaching the halfway point of the current fiscal year following the close of its business license season. It's also worth noting that business license revenue is based on gross receipts from the prior year.

While the city originally budgeted to collect $20 million from business licenses, Tuscaloosa has collected nearly $21 million for the fiscal year to date.

"That shows you last year we had a little bit of a recovery from COVID in terms of what we brought in for revenue, so that's definitely reflected in this number," Scheeff said.

When asked what can be credited with the city's overall economic recovery from a revenue standpoint, Scheeff pointed to "conservative budgeting."

"I would say we always budget very conservatively, especially coming out of COVID, we were even more conservative than we had been in the past," she said. "So I would definitely say that's the main component of [the growth in revenue]."

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