Meridian leaders face revenue uncertainty from COVID-19

Published 11:30 am Monday, May 25, 2020

The office that works to attract visitors to Meridian said it will likely have to cut its budget by $100,000 this year, due to losses in hotel occupancy tax revenue. 

Executive Director Dede Mogollon with Lauderdale County Tourism said her office’s budget is 100 percent dependent on the taxes, collected in the county from hotel stays. 

“For the month of April, the hotels that were traditionally at 68 percent occupancy were at 25 percent occupancy,” Mogollon said. “Consumer sentiment is people will start venturing out traveling, but the impact is going to be significant.”

In the first week after the COVID-19 outbreak began, Mississippi lost half of the jobs in the hotel industry, Mogollon said. 

While April’s revenue numbers won’t be known until June, Mogollon expected her office would have to cut back on marketing. 

The pandemic has created uncertainty for leaders across the county as they wait to see the full impact to revenue. 

Mark Tullos Jr., president and CEO of The Mississippi Arts + Entertainment Experience estimated the museum, which has been closed since mid-March, had lost nearly $100,000 in earned income from admission fees, store sales and facility rentals for weddings and business functions. 

“We have been encouraged by all the response from our supporters and our membership drive, which we started last month, has been hugely successful, and that’s going to sustain us through this rough patch,” Tullos said. 

Meridian’s food and beverage sales tax revenue decreased about $16,652 from February to March this year, according to city records. 

Each month, food and beverage tax revenue goes first toward the payment of $20 million in bonds issued to fund The Max and any remainder is available for the museum’s capital improvements and operating and marketing budget, according to Tullos.

Tullos said he considered March’s revenue to be relatively strong, considering schools and businesses began closing in the middle of the month. 

“It could have been a lot worse,” Tullos said. “If we had seen a total shutdown of all restaurants, including drive thru, then you would have seen that just totally vanish, but we’re so appreciative of all the efforts people have made to help keep our local restaurants in business through this time.”

Records show Meridian’s sales tax revenue went from $1,234,778 in March 2019 to $1,115,132 in March 2020, a difference of about 9 percent.

Mayor Percy Bland pointed out that this March’s numbers were better than January and February, but he was looking ahead to June, when he would learn COVID-19’s impact on April sales tax revenue.

“We’re worried about everything that could happen with the future sales tax revenues, so this next 30 days, 20 days until June 15 hits is going to be very important for us to see what type of trend we’re at,” Bland said. “I know (Chief Administrative Officer Eddie Kelly) is looking at all expenses … take-home vehicles, everything is on the table … but if our numbers come back real bad, we’ll have to make other decisions as it relates to possible furlough days.”

Ward 1 Council Member George Thomas said while March’s numbers were better than expected, he cautioned the losses could continue.

“This could go on through the rest of the summer, so we’re not sure yet, depending on what happens in the fall, if school starts or doesn’t start, with purchases, people coming to town, so it could be an ongoing problem and I am concerned about it,” he said. “If revenue’s down and expenses are up, it could present a problem.”

Council President Kim Houston of Ward 4 and Ward 3 Council Member Fannie Johnson said it was too soon to know the impact of COVID-19 on city revenue. 

Council Vice President Weston Lindemann of Ward 5 said he did not expect a loss in revenue to mean cuts to city jobs.

“The good news is, even if there is a bad situation with a huge dip in sales tax, I think we’re not going to be looking at furloughs like other cities are because we’ve built up such a reserve over the past couple of years,” Lindemann said.