Butler County economic indicators: Foreclosures, evictions likely to jump

‘COVID money was like being in Disneyland,’ commissioner says.

Credit: Nick Graham

Credit: Nick Graham

There are numerous economic indicators that paint a pretty accurate picture of how the COVID-19 pandemic impacted Butler County’s financial wellbeing during the emergency and foretell future worrisome trends.

The Journal-News collected data on 19 economic indicators, everything from personal income and food stamps to foreclosures and deeds. The biggest casualties appear to be property related.

The county is facing a median 37% property value hike next year and many blame it on inflated home prices due to supply and demand and other issues spawned by the pandemic. Just look at the number of new home building permits, they were at a five-year high in 2020 when the pandemic hit with 709 new permits and plummeted to 145 last year.

The median home sale price went from $215,000 in 2019 to $261,000 last year and property tax collections jumped from $519.4 million pre-pandemic to nearly $600 million this year.

Butler County’s chief financial officer Auditor Nancy Nix is warning while property value hikes don’t usually equate to equally exploding taxes, next year is going to be catastrophic.

“As shown by many of the economic indicators, those living on a fixed or lower income are facing serious challenges with the inflation brought on by the increase in money supply and federal deficit spending, as well as energy regulation,” Nix said. “In inflationary times, the rich get richer, and the poor get poorer. For Butler County residents the obscene increase in property values will hurt the most vulnerable among us. So I expect foreclosures and evictions to sharply rise over the next couple of years.”

The federal government held evictions and foreclosures at bay during the height of the pandemic with brief moratoriums on both. Foreclosures dropped from 699 pre-pandemic to 315 in 2020 and 267 in 2021. After the moratorium lifted the number jumped to 569 last year and 333 year-to-date.

Butler County also received a total of $27.7 million in state and federal government funds for rent and utility assistance — 5,455 residents have been helped — but the money is nearly gone. Evictions went from 5,226 pre-pandemic to 3,503 and 3,685 over the next two years. Last year they increased to 4,581.

The federal government pumped trillions of dollars into combating the emergency that shut everything down in March 2020. There were hand-outs for individuals, local governments and a host of other sectors and many temporary rules and regulations.

The federal government passed the $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES) in late March 2020, sending money to states to be distributed locally. The county as a whole has received almost $43.7 million.

Then in March 2021 President Joe Biden signed the $1.9 trillion American Rescue Plan Act (ARPA) into law, it allocated $350 billion to help local governments with pains caused by the coronavirus pandemic. Butler County jurisdictions as a whole were allocated a total of $155.6 million.

Food stamp dollars exploded during the crisis

Food stamps are one indicator that is always a good barometer of the economic health of a community, but the 150.8% pandemic hike is deceiving. Allocations given to people in need went from $49.8 million in 2019 to $124.9 million last year. The average number of food stamp recipients only increased by around 26% from 32,954 to 41,487.

Butler County Job and Family Services Executive Director Julie Gilbert said the COVID-19 money inflated both numbers. The rules were relaxed to allow more people to qualify for the benefit, and the federal government gave a huge increase in individual allocations.

“The recipient numbers have remained rather flat over time, so the increases in recipient numbers is based on the amount of dollars recipients had been receiving through the pandemic,” Gilbert said. “On top of that you also in 2021 had where Biden put a permanent increase in the food stamp allotment, it was like 27%.”

She said there is a cost of living increase component to food stamps, and last year the allocations increased another 12.5%. The relaxed regulations and extra benefits for food stamps and Medicaid have now expired.

Commissioner Don Dixon said he expects these numbers to go back to normal levels soon.

“Food stamps are definitely going to go the other way because there’s going to be a lot of pressure on non-public assistance,” he said. “That COVID money was like being in Disneyland, everybody that got it just passed it out. It’s going to take some adjusting in some people’s lives to figure out how to get back in the work routine and understand there’s no free lunch, you’ve got to earn it.”

The national labor force participation rate dropped from 63.3% in January 2020 to 60.1% in April. By August of 2021 it had increased to 61.7% and last month it stood at 62.6%.

The unemployment rate in the county spiked to 7.2% in 2020 when workers were sent home in droves. For the three years pre-pandemic the non-working rate hovered a bit over 4% and it dropped to 3.5% last year and 3.3% in July.

There are roughly 390,000 county residents and 203,500 are among the workforce, according to the state JFS department. As of the end of July 196,900 were employed and 6,600 out of work.

Personal earnings are on the rise

Personal income in the county has grown 12.5% from $19.2 billion in 2019 to $21.6 billion last year, which is only slightly above the $21.7 billion mark in 2021. Bill Even, professor emeritus from Miami University, offered caution that inflation is still tearing into that wealth at an alarming rate.

“While income is rising, it’s not keeping up with inflation,” Even said. “At the very least, inflation has eaten up all or more of the increase in personal income.”

The inflation rate was 1.4% in 2020, soared to 7% in 2021 and stayed in that range at 6.5% last year. Luckily it has dropped to 3.2% this year. Everyone has been worrying for more than a year the country would tip into a recession but Even said it is too soon to tell if that has been avoided.

“It still turns on whether the inflation beast is under control ...,” Even said. “If they can bring inflation down without additional increases in interest rates then I’d say we’re going to have a soft landing. But we’re in a real critical stage in the economy right now. We’re going to see in the next three or four months whether inflation has been tamed.”

Governments fared well in the crisis

The main source of income for the county general fund is sales tax and it has increased from $44.8 million in 2019 — it hovered in that range for several years prior to the pandemic — and the total collected last year was $56.3 million. The trend is continuing with collections at $33.7 million through July compared to $31.6 million the same time a year ago.

When people were shuttered in their homes, many resorted to online shopping to entertain themselves. County Administrator Judi Boyko said she believes the pandemic is still impacting consumer spending.

“There was so much government funding injected into the economy that it didn’t necessarily stifle spending in the greater economy in my perspective,” she said.

The local governments and other entities also received large sums of money so there has been a lot of building and expansion, but that isn’t going to last forever.

“When all that money is gone, that’s going to be the true landscape of what economy looks like from the public sector,” Boyko said.

Cities and townships with Joint Economic Development Districts also collect income taxes. In 2019 the six cities and three townships collected a total of $118.2 million and last year those revenues soared to $146.5 million.

In Middletown, income tax revenues dropped 10% between 2019 and 2020 but skyrocketed from $23 million in 2020 to $35.1 million the next year. City Councilman Zack Ferrell said when the income tax rules changed to accommodate COVID-19 remote workers — people usually pay local income taxes to the jurisdiction where they work — they benefited financially.

It also helped that two of their two largest employers are Cleveland Cliffs and Atrium Medical Center.

“It was work from home, the growth of manufacturing and the pay increases trying to find skilled labor in manufacturing. And honestly it was travel nurses and healthcare working extra hours at Atrium Hospital,” Ferrell said. “So the good thing is Middletown was in a weird way strategically placed to set up to capitalize during COVID.”

The travel industry was decimated by the pandemic and hotel taxes local entities collect dropped from $2.8 million in 2019 to $1.4 million during the shutdown. Tax receipts have recovered nicely totaling $2.9 million last year.

There was however a bright spot to the dark days of the shutdown, according to Tracy Kocher, president and CEO of Travel Butler County.

“I think we can’t continue to focus on 2019 before pandemic simply because people’s preferences and travel expectations have changed,” Kocher said. “I think what people have realized is travel is very important for connection to others from a leisure standpoint, for getting business done.”

Overall Butler County officials are optimistic they weathered the pandemic pretty well, but have their eyes trained on the wobbly economy that was a nasty side effect of the disaster that also tragically took many lives.

Dixon said, “we’re into the post-COVID now, so we’re heading into the new normal somewhat.”

“Our game plan is pretty much the same of invest in what brings us jobs and raises revenue for our sales tax and infrastructure and economic development,” Dixon said. “Just stay the course, it’s nothing we didn’t expect and financially we’re prepared to handle it but it’s going to take 24 to 36 months to kind of sort itself out.”

About the Author