The Regional Transportation Authority’s 20-year plan for transportation improvements in the Pima County region relies on a half-cent excise tax for a significant amount of RTA project funding, but in the year since the COVID-19 pandemic began, consumer shopping habits have changed dramatically to help prevent the spread of the virus.
Due to the diversity of sources from which the excise tax is collected, however, the RTA has seen overall stable funding throughout the pandemic-associated economic challenges.
Tax collection categories in which revenue has declined in the past year:
- Restaurant and Bar sales have been down due to COVID restrictions for indoor dining and consumption
- Communications-related taxes collected from cable TV, internet and cell phone providers
- Hospitality and tourism-related industries are down due to reduced tourism and travel, though the Bighorn Fire in the Santa Catalina Mountains brought an influx of out-of-town firefighters and hotel rooms booked for their safe lodging led to an unseasonal increase in lodging taxes during the summer of 2020.
Tax collection categories in which revenue has increased in the past year:
- Online sales have been stronger during the pandemic than before, and now make up almost 10% of the retail sales taxes collected by the RTA.
- Taxable contracting activities jumped to record-setting amounts, even exceeding the pre-recession housing boom of 2007 and 2008.
Altogether, the areas where revenue increased made up for the areas where it decreased, and the RTA is on track to meet pre-pandemic revenue projections for the fiscal year that spans July 2020 to June 2021.