Butler County consumer spending beat last year in August: What that means

Butler County shoppers continue to help the county’s bottom line in this coronavirus economy, boosting sales tax numbers to almost $4 million for spending in August, a 3.4% increase over a year ago.

Butler County brought in $3.95 million, more than the $3.8 million collected in October a year ago. Sales tax collections lag three months so this collection reflects purchases made in August.

By comparison, Hamilton County saw a 1.65% drop year-to-year to $10.7 million this month, Montgomery County experienced a 6.4% increase to $7.2 million and Warren County dropped 0.32% to $2.8 million.

Butler County officials initially predicted a 30% drop in sales tax and a $20 million drop in general fund. Sales tax makes up about 45% of the general fund.

Miami University Economics Professor Bill Even said the $1,200 federal stimulus checks and extra $600 in unemployment benefits helped maintain spending, among other factors. He said the unemployment rate in September was 8% compared to 3.9% last year.

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“It’s a bit of a puzzle,” Even told the Journal-News. “What we don’t know is the folks that kept their jobs, have they for some reason started to spend more than they would have otherwise? You would expect the folks that don’t have jobs and don’t have the paycheck they did a year ago, you would expect their spending to be down and tax revenue to be down.”

State law also changed last year allowing more collection of online sales tax after a U.S. Supreme Court battle.

State lawmakers inserted a provision in the 2019 biennial budget bill that requires out-of-state vendors who sell more than $100,000 and/or 200 orders in a year charge and collect Ohio sales tax. The law took effect last August.

Prior to that court decision, vendors could only be taxed if they had a physical presence within a state.

“It’s possible while people might be doing the same amount of online shopping, it might be that Ohio is now better able to capture the sales tax off online sales,” Even said.

Ohio Department of Taxation spokesman Gary Gudmundson said he could not provide a breakout for online sales tax collections.

Based on early projections, the commissioners asked all other elected officials, departments and independent board that rely on the general fund to cut 7.4% cumulatively over this year and next.

The commissioners are in the midst of budget hearings to craft the 2021 budget, and several offices, including the sheriff and Juvenile Court, have asked the commissioners to allow them to deviate from the directive. The commissioners have indicated some adjustments will likely be made.

Commissioner Don Dixon said officials don’t know what the future holds, so while he is thrilled they have been wrong in their predictions so far, they will remain conservative going forward.

“We’re just going from month to month and we have our plan, we have our hands on the numbers,” Dixon said. “We watch the numbers weekly as they come in, and monthly as they come in, when sales come in, real estate transfers and building permits all that kind of stuff. We’re just holding our breath and hoping that it continues.”

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