By JAN LARSON McLAUGHLIN
BG Independent News
With many stores shuttered and cash registers sitting idle for the last six weeks, the sales tax revenue normally going into county coffers has taken a nosedive.
Sales tax has long been a steady source of revenue for the county – accounting for half of the Wood County general fund budget of approximately $43 million. Last year, sales tax revenue brought in nearly $22 million.
While interest rates and investments waiver, the county has been able to bank on solid sales tax revenue.
But that all changed when Ohio ordered non-essential businesses to close and issued stay-at-home orders for residents.
Wood County Administrator Andrew Kalmar said he is expecting a “significant drop” in the sales tax revenue. Not only are most retail shops closed, but restaurants serving delivery or pickup food don’t collect sales tax.
Sales tax receipts always lag a couple months, so county officials don’t know yet what the numbers will be for March, April and May.
Last year, the spring months tallied sales tax revenue as follows:
- $1.9 million for mid-March to mid-April.
- $1.87 million for mid-April to mid-May.
- Nearly $2 million for mid-May to mid-June.
Thankfully, Kalmar said, sales of items online are now charged sales tax. Those internet sales numbers may come in even stronger, since people are purchasing some items online that they can’t purchase at closed brick and mortar sites.
“My understanding is internet sales are still strong. Thank goodness for that,” Kalmar said.
Even when stores are open for business, Kalmar is not sure how quickly the sales tax revenue will rebound.
“People have lost their jobs,” and may be reluctant to spend money, he said.
In recent years, Wood County has benefited from a boom in retail growth, primarily in the Perrysburg and Rossford areas. Many stores that local residents previously had to go to Lucas County to patronize, can now be found on this side of the Maumee River.
Because of the growth in retail, Wood County was seeing an increase in sales tax revenue without increasing the sales tax rate.
Other county revenue is also being affected by the pandemic, Kalmar said.
The county engineer’s office is seeing a serious dip in revenue from gas sales.
“People can’t go places anymore. So fuel sales are way down,” Kalmar said.
The sheriff’s office is also seeing a drop in revenue at the county jail from housing prisoners from other counties. Efforts to limit the number of inmates in the county jail has led to no outside prisoners from being accepted.
Kalmar is also expecting the state to rethink its reimbursement to counties for public defender expenses for indigent defendants. The state recently agreed to split those expenses evenly with counties. But Kalmar is guessing the state legislature will want to revisit that change.
The effects of the pandemic on the county’s general fund will undoubtedly linger, he said, with delinquencies expected in the future as citizens are unable to pay their taxes.
The drop in interest rates will also impact the county’s coffers. Income through interest used to be a big chunk of the county’s revenue. Back in 2007, the county made $4.6 million from interest revenue. In recent years, the interest revenue had dropped under $1 million.
“We had just started to make a little progress with the interest rate,” Kalmar said.
When the state first issued stay-at-home orders in mid-March, the county commissioners office sent out a memo advising all county departments to put a hold on non-essential purchases. That meant a suspension of new equipment, office furniture and capital projects.
The pandemic has also created some unexpected expenses for the county. Plexiglass dividers are being built for offices by maintenance staff.
“Be careful to stay in your budget,” Kalmar said of the advisory. “They understood. We’re all in this together.”
At the end of the year, county officials will have to revisit the budget.
“We were in a sound financial position when all this started,” he said. So Kalmar is hopeful that will help the county weather the pandemic.
