Dothan City seal

Dothan municipal tax revenue took a dip last month, but overall recent economic growth and conservative spending by its governing body have kept the city fiscally strong during the coronavirus crisis.

Records show the city collected almost $5.3 million in tax revenue, coming in $412,787 under budget for May. Collections in May represent sales in April.

“Our revenues were actually better than we anticipated,” City Manager Kevin Cowper said. “To some degree, we were pleased with the revenue we did collect.”

Sales tax revenue collected was a little more than $1 million less than the city collected in the same month in 2019, representing a 17% drop. Cowper said the city was prepared for a 30% drop.

Sales revenue was down as a result of Gov. Kay Ivey’s order April 3 to begin shuttering certain businesses. Other types of businesses were ordered to close later in the month.

Cowper acknowledged the lack of people getting out and doing their normal shopping and eating out at restaurants resulted in the shortfall.

However, seven months of tax revenue topping budget projections have given the city government a $3.8 million surplus for the fiscal year.

Currently, the city’s sales and use tax revenue is just 2.6% behind that collected by this time last year.

“We budget very conservatively,” Cowper said. “We will typically budget knowing we’ll bring in more than that.”

He said surplus money will be divvied up among the general fund balance, new capital projects and permanent reserves.

Cowper said he expects the city will fare about the same — maybe better — regarding sales tax collections over the next month, which will represent May sales. For the remainder of the fiscal year, he believes sales tax revenue will beat budget projections, ending financially strong in September.

“If things don’t worsen with the public health situation, we’ll recover pretty quickly,” he said.

Lagging collection

Lodging tax revenue, on the other hand, is far below the almost $381,000 the city collected over the same time period in 2019.

In May, businesses remitted $129,943 in lodging taxes. The city budgeted $303,565 in lodging tax revenue, representing an expected uptick in overnight guests brought to Dothan by spring sports tournaments.

Tourism decreased during April as a result of canceled events, closed nearby beaches and public health agencies discouraging travel due to the coronavirus.

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