Mayor Craig Morgan writes a monthly column for the Round Rock Leader.
Any athlete knows that endurance is important. However, as we enter the sixth month of COVID-19′s presence in Central Texas, it’s still unclear how far the finish line lies ahead.
In a survey distributed by the city of Round Rock in April about the effects of COVID-19, 72 percent of respondents said the economic impact of the pandemic on our local community was a primary concern of theirs. We’ve continued monitoring economic conditions and have recently been able to obtain better and more localized data. I’m happy to report the economic decline has not been as deep as we originally prepared ourselves for — however, we still do not completely understand the duration, or how long these conditions will continue to impact our community. In general, Round Rock has fared better than we expected.
While unemployment was still in double digits nationally in July, our local unemployment rate stood at 6.5 percent, down from 10.7 percent in April. However, that’s still triple the percentage it was at the beginning of this year. We are fortunate to have a diverse economy, especially one that is not dependent on oil, as many of our neighbors across Texas are.
Strong sales tax revenues are a big reason that our property tax rate in Round Rock compares favorably to cities around us and across the state, but sales tax is also a volatile revenue source that can drop in times of economic distress. At the start of the pandemic, the city had collected $1.4 million above this year’s expected sales tax revenues. At that time, we thought we might be able to have a surplus of $3 to $4 million by the end of the year that could be used to free up funding for more projects. While we haven’t gained the ground we expected, we haven’t seen a loss in the ground we already had gained. We saw a surge in sales tax revenues in March and April from one specific business – Dell Technologies – and the reopening of retail establishments in June helped re-establish local spending. Most of our major retailers have reopened – IKEA, Round Rock Premium Outlets, movie theaters and some of our big box retailers. Many restaurants have also been able to remain open. However, entertainment venues have suffered a tremendous impact. Bars closed again on June 26 based on statewide orders, and Dell Diamond did not have a minor league season. Other businesses have just not been able to weather the economic downturn. The good news is, although we saw a dip in consumer confidence in April, it has bounced back and is trending upward again.
Occupancy in local hotels is also increasing after a drop in April. Our peak season for tourism is March through June, which saw the biggest impact from COVID-19-related closures. These revenues, which support local tourism efforts and our Sports Capital of Texas initiatives, were down 28 percent for that peak period compared to last year.
Overall, development is strong. Although some businesses have not been able to survive the current economic conditions, many of our businesses are using this moment to pivot and thrive. Our local and small businesses are a huge part of our community, because they are owned and supported by people right here in Round Rock. One of my biggest sources of hope through this pandemic was Round Rock Cares, a local fund that was established to support these types of businesses, which raised $419,500 that helped 241 small businesses. I hope we continue that spirit of supporting our local businesses moving forward.
As we take a brief moment to reflect on the positive indicators we are seeing, we know that we cannot let our guard down. We all must continue to follow state and CDC guidelines to suppress the spread of COVID-19 so that our economy can continue to thrive and residents can continue to make a living. By remaining diligent in our health practices and supporting each other, we will continue to get through this together.