Eureka Springs' sales-tax collections were down 45% in April, the first full month in which many businesses were closed and travel restricted because of covid-19.
"We were expecting worse," said Mayor Robert "Butch" Berry.
Berry said he wouldn't have been surprised if sales tax collections were down 60% in April.
Berry said Eureka Springs relies on the tourism and hospitality industries.
"We're different from everybody else," he said. "We're nothing but tourism."
The city collects 2% in general sales taxes. Those taxes brought in $98,327.72 in April, compared with $178,520.86 in April 2019.
The city gets the tax totals from the state about two months after the taxes were collected by local businesses.
Berry said tax collections are down 2.85% year to date.
The city's sales-tax revenue for March dropped by 18.3% when compared with March 2019.
Berry said he implemented a hiring freeze and cut the budget by 22%.
"I had already directed the department heads to cut all unnecessary expenses," he said.
Berry said the budget cuts and the hiring freeze will remain in place "until we start seeing some improvement in our budget." The mayor said he expects that to happen next month, when the May sales-tax numbers come in.
"I think this was our worst month, I'm hoping," he said of April.
Berry said he's seen more people in town, and more people wearing masks lately. The City Council passed a resolution on June 22 encouraging people to wear face masks.
Eureka Springs' budget for 2020 was $10,803,153, said Kim Stryker, the mayor's assistant. The city sales taxes brought in $2,316,963 last year.
The Eureka Springs City Advertising and Promotion Commission collects a separate 3% tax on lodgings, food and beverage sales.
Rick Bright, finance director for the commission, said April sales tax collections on those things plummeted 83% from the previous April.
The advertising and promotion tax brought in $20,202.31 in April, down from $119,343 in April 2019.
Year to date, the tax collections are down 26.6%.
"Were turning right back around," said Bright. "We'll still be down for [May], but it's improving."