Butler County property tax collections avoid drop during pandemic: Why that matters

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Some economic indicators are showing the coronavirus pandemic hasn’t hit Butler County coffers quite as hard as anticipated, but officials say the worst may be yet to come.

Butler County Treasurer Nancy Nix said the second half property tax collections generated 96.2 percent of the amount billed compared to 96.1 percent for the second half last year.

Nix tempered the positive collection news.

“Many of these payments were already escrowed with mortgage companies, and at least this billing cycle, the mortgage companies have been covering any shortfalls from their mortgage holders,” Nix said. “We attribute a big part of this high collection percentage as a result of federal government programs designed to lessen the impact to taxpayers.

“While we’re happy with this collection, we still feel there could be problems down the road.”

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Nix has said the long-term impact on property taxes might not be felt for a while. Her office could not confirm how many people have been helped by their banks in making up any shortfalls.

“There’s just so much unknown, when will they find a vaccine, can the economy begin growing again and will the feds keep printing money?” Nix said.

County officials also worried foreclosures might skyrocket, but federal aid helped owners. A 60-day moratorium placed on carrying out evictions and foreclosures has been extended through this month.

A year ago, 699 people lost their homes for the first six months of this year in Butler County, and only 224 foreclosures were filed in the first six months of this year, according to Butler County Clerk of Courts Mary Swain. There were 79 foreclosures in January, but that number dropped to 15 in April after the moratorium was instituted, then eight in May and 10 in June.

“Due to the pandemic, hearings were reduced and the sale of properties in default were suspended by court order,” Swain said. “I speculate those factors had a lot to do with the decline in foreclosure cases filed.”

Bankruptcy filings are not soaring as might be expected with so many people out of work. Chris Rapking, operations manager for the U.S. Bankruptcy Court in the Southern District of Ohio, said last year there were 968 bankruptcies filed by debtors in the county, but there have only been 501 fillings to-date.

Early on in the coronavirus pandemic, County Administrator Judi Boyko projected hefty revenue losses for this year, including $20 million in the general fund. Sales tax makes up about 45 percent of the general fund revenues, and she estimated a 30 percent drop this year and probably a 10 percent reduction property taxes due to delinquencies.

The 30 percent sales tax drop has also not materialized. County Finance Director Angel Burton said year-to-date the county collected $28.8 million compared to $29.5 million for the same time period last year, a 2.34% drop.

“Year-to-date collections are not indicative of the economic reality caused by the COVID-19 pandemic,” Burton said. “And we’re proceeding into the 2021 budget season with caution.”

To balance the expected uneven budget this year the commissioners drained the $12 million budget stabilization fund and agreed to use $3 million from a reserve fund that started the year with a $56 million balance. They still needed others to cut 4.14 percent from the total approved budgets for this year and shave an additional 3.3 percent off the reduced figure for next year.

Commissioner T.C. Rogers said they will stay the course on budget reductions, despite the fact numbers look better than they did at the beginning of the crisis.

“We are fine because we put in $15 million to cover the shortfall, we do not have that next year,” Rogers said adding with all the frustration, tension and upheaval in the world, “I know this year will be fine but next year gee wiz, all bets are off.”

Boyko said the commissioners and other office holders brought the county finances through the Great Recession and back to financial health and will do the same during this financial downturn.

“I applaud the commissioners and their leadership because immediate economic indicators do not reflect the long term impact that we believe COVID will have on Butler County’s local economy,” she said. “The commissioners are approaching this with a long-term outlook.”

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