The latest sales tax year ended up being a good one for the City of Dothan with a nearly 8% increase in sales tax collections and record lodging taxes, surpassing amounts collected in 2019 with the influx of Hurricane Michael evacuees.
Based on the final sales tax report for the 2022 fiscal year ending Sept. 30, the city collected nearly $92 million in sales and use taxes, which includes the city’s 9% retail sales tax rate as well as motor vehicle, manufacturing, agriculture and alcohol taxes. The final number was more than $6.6 million over the 2021 collections – a 7.76% increase – and $15.2 million over what the city had budgeted to collect.
“For us to continue to beat the numbers actually, I think it means our economy continues to grow,” Dothan Mayor Mark Saliba said.
The city’s growth shows through in the numbers, but Saliba said Dothan is also seeing more people from a 50- to 100-mile radius contributing to the increase in sales tax revenues.
People are also reading…
“We’ve just got to keep investing in ourselves, taking the money that we have and investing in ourselves for quality of life,” Saliba said.
There were a few bumps during the fiscal year with collections in February, April and June down from the same time in the previous year. Despite those months, the city still collected more than it had budgeted each month.
While the year-end sales tax figures are positive, Saliba said there is a cost to providing city services like fire protection, police, road infrastructure, water, sewer, and electricity. People don’t often think about the expenditure side of city finances, he said.
“In any good business, generally speaking, when revenues are up expenses typically are up as well to some degree,” Saliba said.
Lodging taxes generated nearly $4 million in revenue for 2022, up $534,880 from 2021 and over $802,522 from what was budgeted by the city. The lodging taxes reflect a 15.65% increase in collections over last year.
Visit Dothan received nearly $1.8 million in revenues from the 2022 lodging tax collections and $711 more than the tourism organization received in 2019 when Hurricane Michael flooded local hotels with evacuees and storm relief organizations, said Aaron McCreight, president and CEO of Visit Dothan.
The 2019 fiscal year was a record the organization never expected to surpass and never even used in budgeting for subsequent years because it was such a skewed year due to the storm.
McCreight said much of the reason behind the revenue increase is the focus on sports tourism. Since 2018, there has been a concerted effort to fill the weekends with sports events to draw people into Dothan and hopefully into local hotels.
The number of hotel rooms in Dothan is around 2,700 – a number that has remained consistent in the last four years. Two new hotels are currently under construction.
Weekday travel and hotel stays have bounced back to pre-pandemic numbers, McCreight said, with weekend hotel stays up due to more tournaments being held in the city.
Sports tourism is a highly competitive business. Cities large and small put in bids to host tournaments, which can have a huge economic impact. Dothan has hosted events like the United States Tennis Association’s Boys 14 Clay Court Championships, the Dixie Coach Pitch World Series, and the Ladies Professional Golf Association Q-Series final.
Visit Dothan works closely with Dothan Leisure Services in making bids for tournaments. McCreight said Visit Dothan offers coupons and information on things to do for guests staying in local hotels.
“We look at these tournaments specifically as a way to showcase our city as a leisure destination as well,” McCreight said.
There were 58 total tournaments during the 2022 fiscal year – a record for Dothan. Those included the 73rd Annual Future Masters golf tournament, the Alabama State Games, as well as several other youth and adult tournaments in multiple sports competing across the city.
McCreight said while the Alabama State Games will move to another city next year, Dothan will see the boys’ tennis championship return.
Dothan is also entering five-year agreement with USA BMX for multiple tournaments to be held at Westgate Park’s BMX race track, which is getting a new concession stand and restroom facilities to accommodate larger BMX crowds. The USA BMX championship hero in Dothan in 2021 was one of the biggest events of that year with $1.6 million in visitor spending.
USA BMX has brought 16,000 visitors to town since 2016, McCreight said. Those same visitors spent more than $5 million locally.
“There are weekends where we have multiple events happening because we have all these great facilities and venues – we can have a swimming event at the same time we have a tennis event and at the same time we have a baseball event,” McCreight said. “That reliance on the city and the leisure service staff is invaluable.”
Peggy Ussery is a Dothan Eagle staff writer and can be reached at firstname.lastname@example.org or 334-712-7963. Support her work and that of other Eagle journalists by purchasing a digital subscription today at dothaneagle.com.