Local economy getting better, tax data show

Sales tax revenues

*April figures show sales tax revenues disbursed by the Ohio Department of Taxation in April and reflect sales taxes actually collected during January 2012. Source: Ohio Department of Taxation

Montgomery and Greene counties recorded their 23rd consecutive month of sales tax revenue gains in April, and other counties in the Miami Valley also reported gains in sales tax revenues disbursed by the state in April and the three preceding months.

The gains strongly suggest a steady, albeit slow, economic recovery is well under way across the Miami Valley, county and economic development officials said Friday.

“The increases we’re seeing, especially in early 2012, reflect an overall economy in the Dayton region that has been improving,” said Chris Kershner, vice president of public policy and economic development for the Dayton Area Chamber of Commerce. “People are feeling more comfortable with spending, because they have greater confidence in the economy in this area,” Kershner said.

Kershner credited the diverse selection of retail offerings in the Miami Valley and said the sales-tax numbers show that Dayton-area residents “are committed to buying local.”

Sales tax collections are particularly important because they are considered to be the ultimate barometer of retail sales — and retail sales account for two-thirds of the American economy.

In April, sales-tax disbursements rose in every county in a five-county Dayton area, ranging from a 3.1 percent increase to about $2 million in Warren County to a 14.3 percent increase to $1.6 million in Clark County. For the first four months of 2012 combined, Montgomery County led the way with a 7.4 percent jump to $23.1 million, while Greene County’s sales tax disbursements rose 4.7 percent to $7.7 million, according to data from the Ohio Department of Taxation.

The state’s disbursements lag behind collections: sales tax revenues distributed to counties by the Ohio Department of Taxation in April are based on sales taxes collected from consumers during January.

County officials welcome the rebound of sales tax revenues but caution that the increases do not make up for losses in property taxes, state funding, interest income and other funding.

Montgomery County Administrator Deborah Feldman said sales taxes provide about 40 percent of the county’s total budget and therefore represent an important source of income. After dropping dramatically in the depths of the recession in 2009, when sales tax collections plunged by $7 million, the current collections appear to have returned to prerecession levels, Feldman said.

But the restoration of the sales tax revenues do not make up for a drop in property-tax collections or for state cuts to the Local Government Fund and other state funding. And because of low interest rates, Montgomery County and other counties now make less money in interest income, Feldman said.

In addition, Feldman pointed out that the sales tax base was expanded in October 2009 to include direct payments to managed-care programs. That change brought in additional sales-tax revenue and affected year-over-year comparisons for the subsequent 12 months.

In Miami County, County Commission President John “Bud” O’Brien said the additional sales-tax revenue “gives us a little breathing room with our budget. However, we have not made any significant general fund budget increases because of the uncertain economic health of the Miami Valley and state of Ohio.”

He said sales tax income basically is back to 2008 levels.

Staff writers Nancy Bowman and Sharahn Boykin contributed to this report.