City planning for decrease in sales tax revenue

ABERDEEN, S.D. ( – Aberdeen has yet to see the effect to sales tax revenue lost as a result of COVID-19 measures that have been taken, but city officials aren’t waiting for it to hit before taking cost-savings measures.

Information from the state is already showing a 48.2% decrease in the weekly average of video lottery net machine income and a 70% decrease in travel spending, according to a report from the South Dakota Bureau of Finance and Management.

City Manager Lynn Lander said state officials don’t have any hard numbers yet, but he told the city council Monday that trends are indicating municipalities could see a 20% decrease in monthly sales tax.

Aberdeen currently receives about $18 million in sales tax revenue annually from its 2% sales tax. That’s about $1.5 million per month. A 20% reduction is a $300,000 hit. Of the $18 million, $9 million goes to the city’s capital outlay budget, which is used for loan payments and city street projects.

City officials have yet to see a decrease in sales tax revenue. In fact, reports for March, released in recent weeks, show Aberdeen businesses reported $1.44 million in sales tax receipts. That’s up about 3.5% from March 2019, when $1.39 million in sales tax receipts were reported. It’s also up from February’s municipal sales tax report showing $1.42 million in sales tax. February’s receipts were down slightly from February 2019, which was $1.44 million.

January receipts were at $1.89 million. That is up from January 2019’s $1.79 million.

Lander said early sales tax receipts were showing signs of a good year for Aberdeen. Now, the months to come are unknown.

(for more on this story visit