ANACORTES — After a big financial hit this spring, the city of Anacortes’ sales tax revenue is expected to rebound slightly, reflecting an uptick in spending as businesses reopened and more began moving about their communities earlier this summer.
The sales tax revenue the city has received over the past four months is on average about 16% below what was expected before the COVID-19 pandemic, City Finance Director Steve Hoglund said.
“It’s about $224,000 below what we had budgeted for, it’s a significant amount of money,” he said.
The figures reflect consumer spending in March, April, May and June, due to the two-month lag time for the city to receive its portion of sales tax from the state.
Sales tax collected in April showed the biggest drop — about 30% under city projections, according to a finance update presented Monday night to the Anacortes City Council.
Tax revenue collected in June was 9.7% below what the city had budgeted, according to the presentation.
“With restaurants starting to open up and (more) hotel stays, I’m encouraged that at least it’s going in the right direction,” Hoglund said. “It’s not continuing to drop.”
Hoglund said lodging tax for June, a fee on hotel and motel stays, is about 50% lower than such revenue from last year, but is up from the spring.
He said the city has adjusted its budget by cutting spending in the areas of training and travel, for professional services such as consultants, and through attrition.
Hoglund said the city is looking at switching from a biennial budget to an annual budget in order to have more flexibility due to the uncertainty of COVID-19 and the economy.
The Anacortes City Council may vote on the switch as early as Sept. 14.