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Some Arkansas Cities See Income Climbs Despite Virus

Several Arkansas cities saw economic prosperity in April, a month in which travel was restricted and many businesses closed because of COVID-19.

The Arkansas Municipal League says that sales tax collections have been closely monitored during the pandemic. The majority of the some 500 cities and towns in Arkansas have a city sales tax. The numbers reflected in the Municipal League report reflect only citywide sales tax revenues, and do not include any advertising and promotion taxes.

Mena saw a 3% increase in city sales tax collections in April, 2020, compared to April, 2019. Sales tax revenues in Mena in April, 2020 generated $152,803, compared to $148,591 in April, 2019. The City of Mount Ida saw an even bigger increase of some 7%. Mount Ida tax collections in April, 2020 were $25,351, compared to $23,750 in April, 2019.

The Municipal League and several Mayors around the state attribute some of the April increase to people buying online. Mayors had been anxiously awaiting the April numbers. Governor Asa Hutchinson implemented some travel and business restrictions in late March, but April provides a better picture of economic activity during the pandemic because restrictions were in place for the entire month.

The April economy was also helped out by the $1,200 federal stimulus checks and even more so by the $600 per week provided to unemployed people through the CARES Act. The increased unemployment benefits are set to expire on July 31st.

A breakdown of Arkansas spending changes by category from January through June revealed these fluctuations: Apparel and general merchandise increased 20%, and groceries increased 13.8%. Transportation declined 53.3%. Entertainment declined 44.4%. Restaurants declined 23.3%.

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