Tourism Tax Revenue Down Sharply From Last Year

DULUTH, Minn.– It’s been an unprecedented time for tourism revenue in Duluth as the city navigates through financial issues related to the pandemic and its lack of tax revenue from businesses that are struggling.

On Wednesday, the city of Duluth released the latest numbers contributing to its major budget shortfalls because of the pandemic.

This is in preparation for when the Duluth Mayor Emily Larson and city council will meet next Monday to review financial reports from January to April, as well as the latest budget projections.

“We will be updating from those projections and actually what you’ll find is that many of those projections were spot on based on the indicators that our finance team has been tracking,” said Larson.

The April revenue that funnels into the city’s Tourism Tax was down considerably from last year.

One area impacted was the Hotel/Motel Tax, which goes into the tourism tax, saw revenues drop 87 percent from last April. That’s after it started the year up 5 percent in January.

The Food and Beverage Tax saw similar increases early this year before falling by more than 60 percent.

Mayor Larson says that while gains to those numbers were made in may there’s still a long way to go to reach financial stability.

“It is going to take us a very long time to get out of this hole. Because these revenue numbers do not just move forward and keep going,” said Larson.

The city will be watching to see how much funding they are eligible for from the federal CARES Act as the state works on receiving and distributing it.