Mahoning Valley sales-tax collection down this year
YOUNGSTOWN
Sales-tax data for the first four months of 2013 were mixed in the Mahoning Valley, underpinning a sour jobs report here earlier this week and signaling a slowdown in consumer spending that increased markedly last year.
Sales-tax collections, considered a benchmark for retail sales and a broad measure of the region’s economic activity by local economists, declined in two of the Valley’s three counties between January and April, according to the latest data available from the Ohio Department of Taxation.
Last year, a jump in employment unleashed pent-up demand that drove strong sales throughout the region, and an uptick in oil and gas activity in Northeast Ohio helped lift the figures as well, economists said.
But as drillers have set their sights on the southeastern portion of the state, and data with the Ohio Department of Job and Family Services through the first half of the year show a jump in the Valley’s jobless rate, it appears sales-tax collection has leveled off for now.
“We need to speed up the rate at which Ohio is finally recovering some of the jobs that it lost during the recession,” said Cleveland-based economist George Zeller. “Further, we need to stop cutting the wages paid to workers who do have jobs. The problem of falling wages has undoubtedly slowed the rate of consumer spending in Youngstown-Warren, as it has elsewhere in the state.”
On Thursday, the U.S. Department of Labor released data from its quarterly census of employment and wages. The figures showed that Ohio ranked below the national average in the fourth quarter of 2012 for both weekly pay and wage growth. Ohio tied with North Carolina for 29th among 50 states.
Nationally, the average weekly wage was $1,000, while Ohio’s average was $887.
When adjusted for inflation, sales-tax collection during the first four months of the year was $10.5 million in Mahoning County — a decrease of 0.3 percent from the same time a year earlier.
Though the drop seems minimal, Mahoning County Commissioner David Ditzler said it makes a difference.
“It really is a problem,” he said. “We’ve got an approved budget of $52 million this year, and we requested expenditures of $62 million. When you have that kind of spread, every little bit counts, and hopefully those numbers will pick up by the end of the year.”
Trumbull County saw a decline as well, reporting $7.9 million in sales-tax collection from January through April, down 0.7 percent from the same time a year earlier when adjusted for inflation.
Sales tax in Columbiana County increased by 1.3 percent for the same time period, bringing in $5.1 million. The oil and gas industry has helped collections there, as the county remains an epicenter for activity with more permits than any other county in the state, except for Carroll and Harrison counties.
In its monthly financial report, released June 10, the Ohio Office of Management and Budget wrote, “Due to the continued ups and downs in the performance of [nonauto sales tax] over the course of the fiscal year, OBM continues to closely monitor its performance to determine what factors are driving this erratic behavior.”
According to the OBM, the nonauto sales tax rebounded from its poor performance in April when May receipts were $649.7 million and exceeded the department’s estimate for the month by 8.1 percent.
Still, the gain made up for a shortfall of $49.9 million in OBM’s estimate for January through April.
Auto sales tax continued to be a bright spot in May, though, reaching $110.4 million statewide and exceeding the OBM’s estimate by 15.6 percent.