The good news is that retail sales tax revenue rose in May and June in Wilkes County, despite expectations of a drop due to the coronavirus pandemic.
Tempering this news is that it apparently mostly resulted from people spending pandemic-related federal stimulus funds like $600-a-week unemployment checks and $1,200 “Economic Impact Payments.”
In addition, local residents curtailed travel to places outside Wilkes earlier in the pandemic and therefore spent more money at home — and spent more on their homes. Low interest rates are an important factor. Federal Paycheck Protection Program grants helped small businesses weather the pandemic’s initial shock.
Wilkes Economic Development Corp.’s Small Business Grant Recovery Program grants helped. Testimonials from many of the 20 retails businesses, 49 service-related businesses and 34 restaurants that received these $1,000 grants clearly demonstrate their importance.
Whatever the reasons, certain aspects of the economy in Wilkes remained strong and local government officials were relieved to see substantial increases in sales tax revenue in May and June. For county government, it increased 18% (up by $256,659) in May and 27% (up by $394,435) in June over the same months in 2019. The towns had similar increases.
Sales tax revenue essentially was flat in the first two months of the pandemic. For county government, it rose 3% in March and dropped 1.42% in April compared to the same two months of 2019.
County government’s sales tax revenue in fiscal 2019-20, which ended June 30, exceeded what was budgeted by 10%. Local government officials expected less sales tax revenue in at least part of fiscal 2020-21 and constrained spending accordingly in the budgets adopted in June.
Meanwhile, the impact of COVID-19, federal relief efforts, the election and other uncertainties loom ahead.
The Federal Reserve pledged to keep interest rates low to boost the economy and help recover jobs lost in the pandemic, but whether Congress reaches an agreement on another stimulus package with more checks for taxpayers is uncertain.
Some question if Congress should approve another stimulus package. There is fear that the trillions of federal dollars spent on coronavirus-related stimulus and interest rates kept near zero could drive up inflation, leaving Americans with higher consumer prices, less purchasing power and fewer jobs.
Still, most economists say more stimulus spending is needed to keep the economy on track toward recovery.