SANTA BARBARA — The city of Santa Barbara announced Thursday that revenue from sales taxes and transient occupancy taxes were up in March and April, respectively.
The city received $5.5 million in sales tax revenue during the quarter that ended March 31, which is 41% above the same quarter last year. In addition, the city collected more than $1.7 million in transient occupancy taxes for April 2021, about 7% higher than April 2019. City officials noted that the TOT revenues increased because of increased average daily rates, which are 55% higher than April 2019, with occupancy still slightly down 1.2%.
City officials said the increase in sales tax revenue is largely a result of reduced economic activity due to the pandemic and related response that began in the first quarter of last year. The March quarter was 2.2% higher than the March 2019 quarter.
“While a decline in nearly all economic sectors in the economy exists, the decline was offset by larger than expected increases in online sales, which resulted in higher sales tax than originally forecasted for the quarter ending March 2021,” Jennifer Tomaszewski, finance and treasury manager for the city, said in a statement. “As the second largest General Fund revenue, the sales tax budget for fiscal year 2021 is $22.2 million. Staff now project sales tax revenue will end the fiscal year at approximately $21.2 million, approximately 2% less than the budget. Sales tax results for the June quarter — the final quarter of the fiscal year — will be available in August 2021.”
Transient Occupancy Tax, also known as bed tax, is charged to guests at short-term rentals such as hotels and motels. TOT revenues have yet to recover to pre-pandemic levels, as there is still public concern with potential new strains of the virus, efficacy of teh vaccines and impacts to the economy.
The city has collected $11.4 million through the first 10 months of the fiscal year, which runs through June 30. With an adopted budget of $17.2 million, TOT is projected to end the fiscal year at approximately $14.7 million, which is 15% below budget.
— Mitchell White