COVID-19 Pandemic Financial Impacts on Virginia’s Local Governments: A First Look at Total Local Revenue and Vulnerable Local Taxes
Author: Stephanie Dean Davis.; Raymond Zuniga.
Source: Volume 44, Number 02, Summer 2023 , pp.77-102(26)
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Abstract:
This article examines the actual financial impacts of the COVID-19 pandemic on three own-source local revenues: sales taxes, meals taxes, and hotel taxes. Using audited financial data for five fiscal years (FY 2017 to FY 2021) for Virginia’s cities, counties, and towns, the findings show that sales tax revenues and total local revenues did not decline for any category of local government during the pandemic. However, there was a decline in revenues from meals taxes and hotel taxes, although the declines vary by category of local government. Furthermore, revenues from meals taxes rebounded to pre-pandemic levels, but hotel taxes did not. Finally, Virginia towns were shown to lag in recovery as compared to Virginia’s cities and counties.Keywords: COVID-19 shocks, Virginia post-pandemic recovery, sales taxes, meals taxes, hotel taxes
Affiliations:
1: Virginia Tech; 2: Virginia Tech.