City officials: Manhattan brought in more sales-tax revenue than expected during 2020

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The City of Manhattan brought in more revenue in 2020 than officials expected.

Sales tax revenue for 2020 was down by about 2.6 percent from 2019, although officials thought sales-tax revenue would drop by 20 to 30 percent.

Ron Fehr, Manhattan city manager, says this is partially due to a rise in online sales increasing local income from the Compensating Use Tax by 20 to 25 percent.

“That didn’t necessarily help our local businesses,” Fehr said. “Some of them did switch to an online platform. Certainly, as folks were working from home and being home more and more reluctant to get out and engage our retailers, it was very convenient for them to order things online.”

City commissioner Usha Reddi says that even though local businesses are still struggling, that is where stimulus money comes in.

“They’ve had less revenue than ever in the past, I believe, but I think that’s where the stimulus money is trying to focus on, is some of those hospitality industries,” Reddi said. “Hopefully that helps them throughout this entire phase, because it’s not just Manhattan. It’s all of the United States.”

In addition to Manhattan’s higher-than-expected sales-tax-revenue levels, the city has also seen higher levels of savings. The savings are due in part to cuts in city services, particularly to Parks and Recreation.

“We had more than $2 million in additional savings than we typically have had in our general fund,” Fehr said. “As we start the new year, we’re probably stronger financially than have been in a long time because of those cuts that we made.”

Mayor Wynn Butler says the city’s strong financial position shows certain pandemic-era measures should be rolled back.

“With the vaccine rollout, we need to get the city opened back up,” Butler said. “We need to get the restaurants open and we need to save the small businesses. The idea that we’re going to stay closed down like we are now, all the way through the summer, is to me crazy. It’s time to get moving.”

Despite revenue levels being better than expected for 2020, some months did see higher-than-average dips when compared to 2019.

Sales for October 2020 were about 5.36 percent lower than sales for October 2019.

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