To view economic indicators for Warren County go to www.journal-news.com.
More people are opening businesses, buying cars and new homes and unemployment in Butler and Warren counties is below what it was before the economy tanked.
The Journal-News examined 14 economic indicators, including unemployment, sales tax and other data, that point to a recovering economy. Perhaps the most stark indicator was the retail vendor licenses which nearly doubled, going from 359 in 2013 to 634 in Butler County last year.
“That is a huge jump in 2014,” County Administrator Charlie Young said, while noting the first quarter of 2015 showed only 53 new vendor licenses. However, the mega $350 million Liberty Center development is still under construction along Interstate 75, and Young said they are anticipating $2 million annually from that major mixed-use development.
Economists say sales tax is a key benchmark for a healthy economy, and consumers spent about $2.3 million more in Butler County and $2.2 million over 2013 in Warren County. Jessica York-Melcher is one of the new retailers who added to the Butler County coffers last summer, opening Killian’s Cupboard, an antique and furniture refurbishing business in Hamilton.
“Business is going great; it’s actually a little bit overwhelming. We didn’t think it would take off as well as it did,” she said. “We have a lot of custom orders, and I think word of mouth has really helped us. There’s people in every day wanting something new done or to restore their furniture or have something painted. I saw a need for that in our area… I was right.”
Most local officials are cautiously optimistic that things have turned the corner since the bottom fell out of the economy in 2007 and 2008. Martin Russell, Warren County’s economic development director, who also helps the Butler County Port Authority with deals, said they are definitely busy, but it has taken time for people to rebound after the Great Recession.
“It appears that things are moving in the right direction,” he said. “I would say that is probably because the last recession was so deep and there was just so much turmoil out there, that I think everybody is very hopeful, but they are always looking over their shoulder just a little bit. Everybody’s cautious.”
Michael Jones, assistant economics professor at the University of Cincinnati, said consumer spending and jobs are the two best indicators of the economy’s health, but unemployment percentages — which are at 4.8 percent and 4.5 percent in Butler and Warren counties, respectively — can be deceiving.
There is always the fact that some people might be under-employed since the recession, which doesn’t exactly bode well for consumer spending. Jones said the important numbers to gauging economic recovery are actual numbers of employed people. The Ohio Department of Job and Family Services provides monthly averages that are instructive, he said.
Jones has declared Warren County fully recovered with an average 105,400 people working, compared to 103,200 in 2007 prior to the recession. Butler County is still lagging a bit behind with an average 176,700 people working, which is 4,200 fewer people than 2007.
“To me, employment itself is a better measure,” he said. “Looking at the raw number of people employed, that’s probably the most telling story from the labor employment perspective.”
Another good measure is the total income income workers in the county are pulling in. Dawn Mills, chief deputy Butler County auditor, said 2014 numbers are not available yet, but income jumped 18 percent from $13.56 billion in 2012 to $13.58 billion in 2013. Those numbers are critical, according to the county administrator.
“What’s the buying power? That kind of comes down to what you want. You want full employment, whatever that means, 4.5 to 5 percent unemployed, but the ability of the consumer to drive the economy is also somewhat tied to the disposable wage,” Young said. “So if you have people working part-time who want to be full-time, there are concerns there.”
Larry Wager is another entrepreneur who has opened a post-recession business, but he said he can’t quit his day job truck driving until he gets his business loans paid. His brain child is 3D Creation Station in Middletown, which opened for business in the Pendleton Art Center last fall. Using 3D printers he can create knick-knacks, molds, gifts, prototypes and other useful objects out of plastic. Opening the business was a no-brainer for him.
“3D printing is such a fast growing technology, it’s grown leaps and bounds overnight. I’ve got printers that are going to be outdated because the technology is growing quicker than you can keep up,” he said. “I knew it would be catching on real big.”
Just about the only economic indicator that has remained stubbornly stagnant is investment income. Before the recession, Butler County was earning almost $12 million on investments, but that has dribbled down to $1 million. Likewise in Warren County, investments yielded $10 million in 2007, dropped to $971,688 in 2013 but jumped up to $1.2 million last year.
Butler County Treasurer Nancy Nix said while lower interest rates have been good for consumers, they have knocked the socks off investments.
“Butler County’s stagnant investment income is a factor of our nation’s historically low interest rate environment of the last 7 to 8 years. This low interest rate environment has negatively impacted any person or institution with funds to invest,” she said. “Fortunately, Butler County’s investment income is beginning to realize stronger returns that will translate into real dollars going forward. We’ve hit bottom, so to speak. The trend is now going the other way, albeit slowly.”
There are other numbers you want to see drop like food stamps. In Butler County, $79.7 million was spent on food assistance in 2011 at the height of the recession, that number dropped to $67.6 million last year and is trending to a $66 million total this year based on the first quarter expenditure of $16.5 million.
Warren County saw food stamp numbers explode from $3.3 million in 2008 to $16.7 million in 2011, the dollars dropped to $12.9 million last year. County Administrator Dave Gully said those numbers are deceiving.
“The food stamp number looks crazy, but we don’t have more poor people,” he said. “We just have more people eligible for food stamps. They turned it into an entitlement program; it’s not means tested anymore. And they also lowered the bar for eligibility. There’s more people on food stamps because they changed the rules.”
Another number everyone likes to see drop are the number of foreclosed homes. In Butler County, there were sheriff’s sales on 3,166 properties in 2010, the highest in the eight-year history this newspaper examined. Last year, the number was cut in half to 1,482. The number looks to be dropping still with only 371 court cases filed in the first quarter of this year.
Foreclosures at their most numerous point in Warren County climbed to 1,495 in 2009, dropped to 637 last year, and there were 167 in the first three months of this year. Real estate agent and county Commissioner T.C. Rogers said foreclosures are down because of the stronger economy, but there are other forces also afoot.
“There’s been lower inventories so the houses which are on the market are selling, especially under $200,000,” he said. “The banks also don’t want any more inventory, so they are working more than ever before with the original homeowner.”
The Great Recession hit the county hard, but the downturn was not the only culprit that sent the county into a downward spiral. In 2008, before the worst of the economic free fall was actually felt, the county was operating under a $94 million general fund budget. Big capital projects and bloated payrolls were to blame for the bulging budget.
Twice, sometimes three times a year, pay hikes and increases in the double digit range were normal back then. In 2009, Commissioner Don Dixon and Supreme Court Justice Sharon Kennedy, who was the domestic relations judge then, convened a summit of office holders, department heads and business leaders, to deal with what was dubbed a “perfect storm.”
The county stopped short of imposing a sales tax hike, but massive layoffs ensued. Today the county has a structurally balanced $88 million budget, a new pay-for-performance model, debt they have halved, a $2 million rainy day fund and an estimated $17 million budget surplus.
Dixon said if another economic upheaval were to happen — some economists say it could in 2019 — the county will not be caught up short again.
“We have all the different programs in place I believe, to deal with anything that comes about,” he said. “Even if it would slow down and turn the other way for a while, we are in a position to where we will never have to go through what we did the last time.”
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