Sales tax revenue for local governments last month dropped by 4.2% compared to February 2020, but the drop is not as sharp compared to previous months during the COVID-19 pandemic, Comptroller Tom DiNapoli said Tuesday.

It's a potential sign of the economy showing some strength as new COVID cases begin to level off, the vaccine is distributed, and some pandemic restrictions are loosened.

Sales tax is a key revenue source for many local governments, helping offset tax increases elsewhere in their budgets, such as property taxes.

“The recent passage of the American Rescue Plan will provide much needed aid to our localities,” DiNapoli said. “The pandemic has taken a toll on statewide sales tax collections during the past year. New York’s local governments continue to suffer financially, but the collections losses are starting to slow as more vaccinations are being administered and businesses are slowly reopening.”

Total sales tax revenue in February stood at $1.3 billion, a $55 million decline from February of last year in New York. Collections are down 12% over the last year, a $2.2 billion drop.