Sales tax collections up in Clark County despite pandemic

Sales tax collections in Clark County are up this year when compared to the same period in 2019 despite the economic impact of the coronavirus pandemic.

Clark County officials say those collections are up by 3.7% between the months of January and July when compared to that same timeframe last year.

That is despite earlier projections in March of a possible 10% drop or more in sales tax for the entire year due to the pandemic.

Money collected by local sales tax make up roughly 60% of general fund revenue for the governmental body of Clark County. A large portion of local sales tax goes to the state, with the county receiving its share later.

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Before the coronavirus pandemic started, county officials had predicted general fund revenues of about $42.2 million for the year. More than half of that was predicted to come from sales tax, which was previously estimated to be at about $25.7 million for the entire year.

The most current report regarding sales tax revenues for Clark County ends with July. Up until that point this year, the county has seen a little over $20 million in those collections. That is up when compared to the same period last year, which saw roughly $19.3 million, according to Clark County Administrator Jennifer Hutchinson.

That is tracking much better than what county officials had initially planned for the year during the months of March and April. At that time, the pandemic and statewide measures designed to curb its spread had an immediate economic impact locally.

The unemployment rate skyrocketed in the county during April, going from 5.3% in March all the way up to 17.4%. In Clark County, there was a 2,746% jump in jobless claims between the week ending on March 14 and the week ending on March 21. During that time, the number of local filings went from 70 to 1,992.

It matched statewide and national trends as both saw record-breaking numbers of new unemployment claims being filed. A statewide stay-at-home order was also enacted in March that called for businesses that were not deemed essential to close their doors.

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That impacted businesses such as gyms, hair salons and the like. Places that were allowed to stay open at the time had to alter their operations, including restaurants switching to primarily carryout and delivery as those establishments could no longer offer in-person dining.

Hutchinson said due to the uncertainty of the situation at the time and the roll out of the stay-at-home order, the county expected a large hit in sales tax revenues. They also anticipated an 8% drop in overall general fund revenue for the year.

Projections at the time regarding potential lost revenue for the county for the rest of the year did vary and went as high as 25%, the News-Sun previously reported.

“It came during a time of uncertainty. A lot of people were being laid off or furloughed. We expected a reduction in revenue based upon the environment at the time. We were trying to be proactive. None of us knew what was instore for the future,” Hutchinson said.

The Clark County commission starting in April began asking all county officials to voluntarily cut or reduce their expenses by at least 10%.

Some agreed to the 10% cut, while other departments reduced expenses by 8.5% or by 5%. The Domestic and Juvenile Court agreed to about an 3% cut and Common Pleas Court settled on cutting around 2% from its budget.

However, with an uptick in sales tax collections over the past few months, those departments have since been partially reimbursed for those cuts, Hutchinson said.

She said it is a combination of higher sales tax collections in January and February as well as in June and July that have helped offset reductions seen between March and May.

The county saw a loss of $382,323 in sales tax between March and May when compared to the same months in 2019. Collections during those months this year was about $5.9 million compared to last year’s total of about $6.3 million.

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But, the months of June and July saw an increase compared to the same period in 2019. Collections were reported to be $5.1 million this year when compared to the $4.8 million collected at that time last year.

However, the county has still taken a hit in terms of revenue from casino taxes and the county’s investment portfolio. Both losses calculated together total at about a million dollars, Hutchinson said.

Ohio began reopening portions of its economy in May and by July, some businesses that had temporarily shuttered their doors had reopened.

But, businesses in the area have continued to alter their operations as the pandemic is still ongoing.

Alex Dietz, the economic development coordinator for Clark County, said that local business owners had to learn to adapt to the changing circumstances. Some added drive-thru windows to their establishments, some restaurants have added patio seating, while some retailers have added curbside pick up.

He said the state allowing businesses deemed nonessential to reopen as well as other changes did contribute to the uptick in local sales tax collections starting in June.

The uptick did allow for the reversal of some measures enacted by the county in order to cut general fund expenses. A furlough order for employees working for the commission was lifted in August. A hiring freeze has also been lifted.

Dietz said moving forward, he expects upward growth and cites the recent or expected openings of several new eateries in the area as a good sign.

Facts & Figures

3.7% - Increase in Clark County sales tax collections between Jan. - July when compared to same period in 2019

$20 million- Sales tax revenue collected in the county as of July

$19.3 million- Sales tax revenue collected in the county between January and July of 2019

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