Huntsville coffers dodge shutdown effects

The longest government shutdown in U.S. history made a dent in Huntsville's books — but not a big enough dent to affect its bottom line.

Why it matters: The Rocket City's economy relies heavily on federal spending and the spending of federal workers, more than 40,000 of whom work on Redstone Arsenal every day.

By the numbers: The city collected $770,402 less in sales taxes in October 2025 than in October 2024.

• The $26.4 million total was a drop of 2.83% from October 2024's $27.2 million, according to numbers provided to Axios.

Zoom out: In fiscal year 2025 (October 2024 to September 2025), the city collected about $314.4 million in sales taxes, a 0.4% decrease from fiscal year 2024.

• But the fiscal year 2024 total of $315.6 million was an almost 3% increase from fiscal year 2023, when the city tallied $306.6 million, a 6.8% increase from fiscal year 2022.
• The October 2025 total was a drop from October 2024, but it was still $1.1 million above October 2023 and $1.7 million above October 2022.

Yes, but: "I think there's a lot of factors that pull into those numbers," Penny Smith, Huntsville finance director, told Axios. "I would not come back and say this drop is due to the shutdown."

• But the shutdown did play a part, she said, as did other factors, like businesses locating in Madison, as well as Huntsville workers living and shopping in other cities.
• Also, the city has seen larger year-over-year drops in the past couple years, including a $2.2 million decrease from March 2024 to March 2025.

How it works: Those revenues come from the city's 4.5% sales tax, supporting the general fund, schools and capital projects.

• That's separate from the controversial Simplified Sellers Use Tax (SSUT), which is charged for online purchases.
• Those funds are collected by the state and redistributed based on population, Smith said, meaning the city can't get an accurate picture of how residents are shopping online.

What they're saying: "My crystal ball has gone blurry," Smith said. "It is very hard to predict what is happening in the economy."

• The city has historically seen 5% to 6% growth year over year, but since the pandemic that trend has been less reliable, she said, and traditional trends have been less reliable.
• For instance, consumer confidence is down nationwide, but spending hasn't dropped with it.

Catch up quick: The government shutdown lasted 43 days, from Oct. 1 to Nov. 12, leaving the tens of thousands of local federal workers and contractors in limbo.

• Local organizations responded with support for affected government and contract workers, including special loans, food drives and more.

The bottom line: That $770,000 dip won't have a real effect on Huntsville's bottom line, Smith said, thanks in part to its conservative budgeting.

• "I don't feel concerned, because we're not moving south of our budget," she said.