Counties may see drop in tax collections

By WILLIAM KINCAID and SYDNEY ALBERT
newsroom@dailystandard.com

County officials are keeping a wary eye on the economic fallout local governments face from the coronavirus pandemic and subsequent shutdown of large parts of the economy.

Mercer County had been on pace for another bumper year of sales tax collections when Republican Gov. Mike DeWine's stay-at-home directive brought much of the local economy to an abrupt halt, county auditor Randy Grapner said.

As of the end of February, 2020 sales tax revenue was up more than $168,000 compared with the same time last year, Grapner said. The general fund sales tax is the county's biggest revenue stream, generating about 43% of its income.

It's too early to know how much the shutdown will affect Auglaize County's sales tax receipts - its largest revenue source - but auditor Janet Schuler said her office is anticipating a reduction.
"We're trying to anticipate what
kind of drop in revenue that we're going to get," she said.

She expected in-store sales to fall, though she was unsure if the amount of bulk purchasing - or panic buying - that occurred in the early weeks of the pandemic could balance the taxes out.

Grapner said he can't measure the shutdown's impact on the local economy because sales tax revenue from March and April has not been reported. It typically takes two to two-and-a-half months for collection totals to roll in.

"We don't know yet," he said. "I don't have any idea of the impact of what may have happened to the sales tax revenues."

State officials at various forums have predicted a 20% reduction in sales tax revenues during the economic shutdown, Grapner said.

But he had no hard data to support that estimate.

"Everybody has an opinion, but nobody has any facts to back anything up," he added.

Also, Mercer County's economic landscape is quite different from that in of other parts of Ohio.

"We are not Dayton or Columbus or Cincinnati. We are not a high-density population metro area," he said. "Mercer County has been the leader in the lowest unemployment. We have had a strong economy in this area, bigger and better than those counties surrounding us."

Mercer County will certainly see a reduction in sales tax revenue, he said. However, he remains cautiously optimistic that the local economy will bounce back.

"Obviously we need to get things opened up. We need to get our people back to work," he said. "If in fact we can get opened up, we're probably going to rebound pretty quickly."

Mercer County's sales tax revenue went through the roof in 2019, setting a record for the ninth consecutive year.

A combination of high consumer confidence resulting in accelerated spending and perennially low unemployment figures were credited for the record-breaking sales tax revenue in 2019.

Schuler was hoping for good news from another source of sales taxes.

Counties receive sales taxes from online purchases, and from what she has heard, online sales have skyrocketed, Schuler said. Whether those taxes could offset a probable drop in local sales tax collections remains to be seen.

She expected some other county revenue sources including local government funding to drop. Local government funds are tied directly to state government revenues, and Schuler anticipated state revenues will also decline.

County officials have not adjusted the amended certificate, an income estimate that limits the amount of money county commissioners can spend. If the certificate estimate were lowered, as it was during the 2008-2009 recession, commissioners would need to curtail spending.

Depending on how things play out, though, amending the certificate could very well become necessary, Schuler said.

Mercer County's general fund sales tax in fiscal year 2019 generated $6.04 million, up $169,794 or 2.81% from the previous year's total.

The adult detention facility sales tax brought in $3.03 million, an increase of $153,534, per Grapner's figures.
  Together, total sales tax revenue in Mercer County for 2019 was $9.07 million.