Poor Business Revenue Amid Shutdown Leaves Alexandria Government With Empty Pockets

Alexandria businesses struggled with poor sales during the shutdown, and now that drop in revenue is coming around to leave the City of Alexandria with little commercial tax support for an already strained budget.

According to information shared by Mayor Justin Wilson, the city faced a dramatic drop off in business taxes in April and May.

The city’s 5% meals tax — which in part goes to fund affordable housing and other city needs — brought back $1.7 million less this year than it did last year. Last April, the city collected $2.2 million in meals tax revenue. This year, it collected $570,984.

The transient tax — a tax on lodging in hotels and similar accommodations — fell from $2.2 million to $570,984.

The only number that increased from 2019 to 2020 was the sales tax, likely because the tax was collected in March before the shutdown was implemented.

Some budgetary losses were expected. The city had planned for substantial cuts to both its operating and capital budgets — $46.6 million for the operating budget and $140.6 million for the capital budget. But seeing the numbers in person still stung for officials.

“We are now receiving the gory details of the fiscal impact of COVID,” Wilson said in the Facebook post. “The difficult work of recovery awaits.‬”

Top photo by James Cullum, graph via Justin Wilson/Facebook