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Date: 1/31/2023
NORTHAMPTON – A second quarter financial report presented during the Jan. 24 Finance Committee meeting indicates that Northampton is seeing improvements in some of their revenue areas compared to the worst of the coronavirus pandemic.
Charlene Nardi, the city’s finance director, presented the report, which depicted the city’s general fund expenses, enterprise revenues, as well as sales from meals tax, traditional hotel lodging, short-term rentals and cannabis. The report highlighted specifics from the first half of fiscal year 2023 (FY23).
“Things are looking really, really good,” Nardi said during the meeting. “That’s good news, as far as we’re all concerned.”
As City Council President Jim Nash explained during the meeting, the city is not necessarily “rolling in money,” but they are on track to meet all the revenue needs of their budget.
“We’re always looking at two things,” said Nardi, when speaking on the report. “How we’re doing compared to our budget, which we’re doing very well…and are we seeing growth?”
According to Nardi, the city’s hotel, motel, and meals sales have rebounded with better numbers since the worst of the coronavirus pandemic, but she is unsure if that is because of inflation or if people are actually returning to the city.
The estimated sales for FY23, specifically in the traditional lodging section, indicate larger numbers compared to the pandemic months. According to a chart provided by Nardi, the estimated sales from August to October are a little over $5.4 million, which is by far the largest numerical value for hotel sales out of any quarter since before 2019.
Nardi explained that the summer and fall is usually a fruitful time for families to stay at hotels in Northampton, especially with it being in a five-college area, as graduations occur and the city generally becomes busier when the leaves change.
Despite an increase in vacant storefronts, Nash said that vibrancy and opportunity are returning in Northampton, especially in the downtown area.
“We’re seeing about $40 million worth of economic activity across all of these sectors,” said Nash. “A good chunk of that represents our downtown…we’re seeing some really strong economic activity since COVID-19. It’s showing that the Northampton economy is recovering.”
Despite some optimism, cannabis remains the one nebulous area for revenue within the city, according to Nardi.
During the months of May, June and July of 2022, the city took in almost $246,000, which is a stark decrease from the $344,000 they took in during that same time frame in 2021, and the $535,000 they took in during that time in 2019. In fact, according to the chart, the city saw its worst three-month stretch for cannabis between August and October in 2022.
The chart indicates that the market has generally dipped in Northampton, which Nardi believes is a “cautionary tale.”
“For revenue purposes only, I need to keep an eye on that because that’s going down,” said Nardi. “And the city has relied on that revenue for its operating budget, so that’s a cautionary tale.”
The City Council just instituted a cap of 12 marijuana establishments in the city after The Source became the first marijuana shop to shut down in the state, at the time.
During a prior Finance Committee in November, Nardi said that the amount the city budgeted for cannabis dropped 15 percent between 2022 and 2023 since the market is still adjusting itself.
“Until it levels out, I’m still projecting downward revenue for this particular source,” she said.
Readers can learn more about the city’s financial standing by visiting the financial chart that highlights the past few years: https://northamptonma.gov/AgendaCenter/ViewFile/Item/20620?fileID=177002.