Sales tax revenues on the rise as consumers open wallets

Sales tax revenues rose throughout the Miami Valley in 2014, reflecting the slow but steady recovery from the Great Recession and providing local counties with funds to pay for government services and law enforcement.

Sales taxes measure consumer spending, a closely watched barometer of economic health because it drives about two-thirds of the U.S. economy. Throughout southwest Ohio, sales tax revenues have been headed upward since tanking in the depths of the recession in 2009.

Montgomery County’s sales tax revenues have risen each year since 2009, when the county received $58.9 million, through 2014, when the county received $73.6 million — a 25 percent jump in a five-year period. The 2014 revenues rose 4.2 percent from 2013.

Tim Nolan, director of Montgomery County’s Office of Management and Budget, said the 2014 numbers suggest that local consumers “have a little bit more disposable income” and are willing to spend it. Nolan said although he doesn’t receive detailed breakdowns from the state regarding the sources of sales tax revenues, he believes robust motor-vehicle sales, along with revenues from a managed-care sales tax that benefited by the statewide expansion of Medicaid, helped boost the county’s sales-tax numbers in 2014.

The auto industry had a banner year nationwide and locally in 2014, and Reichard Buick GMC — at 161 Salem Ave. across the Great Miami River from downtown Dayton — did its part to swell Montgomery County’s sales-tax collections.

“Our new-car year-over-year increase in 2014 was 31 percent,” said Jeff Reichard, the dealership’s vice president. “Our used-car increase was 22 percent. It was really stunning.”

And Reichard said he’s optimistic about 2015. “I anticipate it will be an even better year,” he said.

Sales tax revenues flow into counties’ general fund, which pays for county-government functions such as the common pleas court system, prosecutor’s office, jail and elections, among other services. County officials say the increases in sales tax revenue helps to offset deep state cuts in the Local Government Fund, drops in property tax collections, and lower interest income on investments in recent years.

Because there is a three-month lag time between collection at cash registers to full disbursement by the state to each county, the 2014 sales tax revenues detailed in this story reflect sales receipts between Oct. 1, 2013 through Sept. 30, 2014. Sales tax revenue figures that include the December holiday shopping season will not be available from the Ohio Department of Taxation until March.

Among six counties in the region, Butler County led the way in 2014 sales tax revenue percentage increases over 2013, with a full 7 percent jump to $37.1 million. Neighboring Warren County received a 6.8 percent increase to $34.6 million, according to Ohio Department of Taxation records compiled by Montgomery County officials.

Miami County’s 3.1 percent increase to $16.1 million was the area’s lowest percentage increase, although Miami County Auditor Matt Gearhardt said the 2014 revenues followed a healthier 6 percent jump in sales tax revenues in 2013. The slowing pace of growth, however, has led Gearhardt to project that Miami County’s 2015 sales-tax revenues will be flat, the auditor said.

Clark County collected more than $23.7 million in sales taxes last year, up about 4.9 percent from 2013. Clark County Administrator Nathan Kennedy said the economic recovery and higher prices helped drive the increase.

“The economy is still marching forward in a positive direction … People are feeling more comfortable to spend money,” Kennedy said.

While the U.S. economy is doing well, the county administrator said he remains concerned because Europe, Russia and China are struggling. “Eventually that should have some impact in the states,” Kennedy said.

• Staff writer Tiffany Y. Latta contributed to this report.

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