NORTHAMPTON — The city’s first-quarter financial report showed indications that several economic sectors of the city, such as restaurants and hotel lodging, may be on the mend.
The reports, shared by Northampton’s Finance Director Charlene Nardi during the City Council’s Nov. 3 meeting, displayed current tax revenues and expenses through the first quarter of the 2023 fiscal year. The reports showed the city had an increasing revenue from meal taxes, as well as from short-term rentals and traditional lodgings, compared to previous quarters over the last year. The indication, Nardi said, is that restaurants and hotels are doing better financially then they had in previous months.
“We haven’t increased all of our revenues back to pre-pandemic levels,” Nardi said. “But things are beginning to look good in some areas, so we are pleased about that.”
According to the financial report, which tracked revenue from May through July, meals tax revenue totaled around $203,000, a 15% increase from the previous year’s first quarter. It also represented a 17% increase from the February-April quarter.
Tax revenue from traditional lodgings, such as hotels, showed similar increases, while short-term rentals (such as from Airbnb) also showed a slight increase.
Restaurants and hotels were two of the hardest-hit industries during the COVID pandemic, when people sheltered in their homes and largely refrained from traveling and dining out. Mayor Gina-Louise Sciarra, who attended the remote council meeting from a state school committee conference in Cape Cod, said the report showed the city had done well in revitalizing downtown activities and recovering from the pandemic.
“Although we don’t have numbers for all of the summer, we think this strong meals tax shows we did have a successful summer,” Sciarra said. “All the work we put into outdoor dining and the Summer on Strong really paid off in those revenues, and brought people downtown.”
Sciarra warned, however, that other ongoing concerns about the economy, such as inflation, may affect those revenues going forward.
“People were doing a good amount of spending in the summer, and I just want to be a little bit cautious about not knowing how people are going to be feeling in the winter months,” she said.
Although meals and lodging tax revenues were up compared to the previous year, first-quarter revenues from cannabis sales declined to around $246,000, a nearly 30% drop compared to the previous year, reflecting an overall downward trend.
Northampton City Council President Jim Nash said that although the report showed an overall economic rebound, there were additional plans to address some of the empty storefronts through the city, such as around Florence and King Street.
“We weren’t able to tease out that sector of our economy, that kind of reflects those empty storefronts,” Nash said. “We’re going to be sitting down to hopefully come up with some information and data to share back with folks.”
Reach Alexander Macdougall at amacdougall@gazettenet.com.
