Due to stimulus money and business incentives, Butler County residents didn’t change their spending habits much during the early stages of the coronavirus pandemic, based on county sales tax receipts.
The latest tax distribution from the state showed sales taxes collected in July totaled $3.2 million, compared to $3.7 million a year ago. Tax collections are three months in arrears, so these number reflect purchases made in April, at the height of the economic shutdown due to the coronavirus.
Butler County Administrator Judi Boyko has projected a $20 million revenue shortfall this year for all revenue streams. Sales taxes represent about 45 percent of the county’s general fund revenue. The county collected $44.7 million last year and expects only $35.1 million in 2021. She told the Journal-News federal stimulus and other pandemic financial aid have been supporting the county’s general fund.
She said auto sales have been significantly higher than anticipated because of financing deals and financial help from the federal government, so the severe drop in sales tax hasn’t materialized.
“When the stimulus money was being allocated and distributed, when the unemployment was being extended and increased, that $600 a week, people did not change their spending habits,” Boyko said.
Responding to the expected general fund shortfall, the commissioners drained the $12 million budget stabilization fund and agreed to use $1.5 million from a reserve fund. They still needed to cut 4.14 percent from the total approved budgets for this year, or about $4.5 million. The commissioners asked other office holders and departments that rely on the general fund to cut another 3.3 percent next year.
Finance Director Angel Burton said officials originally estimated a 29% drop in sales tax by July, but the loss has been closer to 5%.
“Consumer spending has been difficult to predict since stay-at-home orders are unprecedented and were fully in effect during the month of April,” Burton said. “We know sales have been impacted by COVID-19 because actual distributions for the relevant months have been 12 to 16% less than previous years.”
Chief Deputy Clerk of Courts Joe Statzer said offices processed 147,693 titles during the first six months of 2019 and 131,421 this year.
“We are booming for June compared to June 2019, but over the last six months we are actually down about 16,000 titles because of the pandemic,” Statzer said. “We only had one office open for over two months. Things are obviously going much better since we reopened all three offices.”
Clerk of Courts Mary Swain routinely turns excess title funds to the county general fund. She transferred $1.75 million this year to help with the budget shortfall.
Jon Honeck, senior policy analyst with the County Commissioners Association of Ohio, said the same is happening statewide, but officials don’t expect it to last.
“There are only so many cars people can buy,” Honeck said.
Commissioner Don Dixon said the increases in coronavirus cases after reopenings has made him less optimistic. He said the county will continue with with the cuts already in place and future reductions planned for next year.
“Just because we’ve got a sales tax number that’s above what we thought was a worst-case scenario, which now is not the worst-case scenario, that’s still not good,” Dixon said. “At some point in time somebody has got to set the alarm off, and I think it’s time the bells start ringing.”
Property taxes are the second-largest revenues source. The county collected $14.4 million last year and expects $12.3 million in 2021.
County Treasurer Nancy Nix said it is too early to gauge property tax revenues — the deadline is Aug. 3 — but some mortgage company payments have not arrived yet and she expects the banks to cover any shortfalls this year.
“My counterparts across the state who have earlier due dates have said collections have come in better than expected,” Nix said. “I think the true suffering will become apparent next year after the federal money dries up, if that ever happens.”
When the state released $350 million in federal coronavirus relief funding to local governments it held another $850 million back, that was earmarked for the local governments, according Honeck, that could —depending on what Congress does —be used to shore up depleted revenues due to the pandemic. U.S. Rep. Warren Davidson, R-Troy, introduced a bill that would relax restrictions. Currently the funding can only be used to reimburse expenses.
“That would be a huge help,” Honeck said. “I don’t want to handicap what Congress may or may not do, but we’ve been having those discussions and in general I think the Ohio Congressional delegation has been pretty supportive of making these more flexible.”
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