TAX NEWS - JUNE 2010

Ohio Tax: County sales tax revenue lagging

DAYTON — Montgomery County officials say sales tax revenue — up in April and down in May — is a sign the economy is still sputtering.

"The feeling is that we are nowhere near getting out of this recession," said John Parks, Montgomery County's budget and financial planning manager. "Our major sources of income, property taxes, investment income and sales tax, are all in decline."

Data from the Ohio Department of Taxation released on Thursday, June 3, showed May sales tax distributions to Montgomery County fell $440,721, or 9.8 percent, compared to the same period last year. May figures did include a $300,000 one-time vendor refund, Parks said. Even without the refund, the county still experienced a 1.7 percent decline, Parks said.

These distributions reflect sales tax paid by consumers in February, collected by the state in March and distributed to counties in May.

Sales tax revenue rose 9.7 percent in April, a positive after declines every month in 2009 for Montgomery County.

"Now we're finding it's not consistent," Parks said. "We're not in panic mode yet. We're looking for a rebound this summer."

A tax increase approved by the Miami County Commission in October 2009 generated most of the 30 percent growth in sale tax revenue there for May. Funds from the increase in the county's permissive sales tax, which went from 1 percent to 1.25 percent, began flowing into county coffers in January. The additional 0.25 percent is earmarked for upgrades to the county's 911 emergency call center and cannot be used for general operations.

May sales tax distributions to Miami County were $938,299, up $216,978 from May 2009. Of that, about $33,400 represents actual sales tax growth outside the 0.25 percent increase.

"It's a positive," Miami County Auditor Matthew Gearhardt said. "Hopefully, in June we will be able to establish whether we are really turning things around."

Greene and Warren counties both experienced declines in sales tax revenue for May, according to the state data.

Greene County figures were down by just over $51,000 and Warren County, $71,881.