Valley tax revenue shows consistent growth

By KALEA HALL

khall@vindy.com

YOUNGSTOWN

Mahoning County saw a 45 percent increase in its tax revenue from 2010 to 2015.

Part of that increase is because of the 2015 tax-rate increase, but the other part comes from increased consumer spending.

Large purchases – such as new vehicles, clothes and houses – all come with a price tag that includes a sales and use tax.

All have fueled the consistent increase in sales and use tax revenues for the three Mahoning Valley counties over the past five years.

“I read it as a reflection of the sound economy,” said George Mokrzan, director of economics at Huntington Bank. “I think it is a reflection of consumers doing better. It reflects growth.”

Sales and use tax is on most items, including employment services, lawn care, fitness memberships and dry cleaning. Several items are exempt including food and prescription medication.

The revenue generated goes to the county governments.

MAHONING COUNTY

Last year, Mahoning County’s sales and use tax revenue went up to $39.9 million from $33.9 million reported in 2014, according to data released by the Ohio Department of Taxation. The growth shows the 0.25 percent increase in the county’s tax rate that took effect April 1, 2015.

The tax-rate hike was needed to compensate for losses in revenue from the state, from investment income and from housing federal prisoners in the county jail, county commissioners said.

But even before that increase the county saw consistent tax revenue growth going from $27.4 million in 2010 to $29.6 million in 2011 to $30.5 million in 2012 and to $31.7 million in 2013.

Mahoning County Commissioner Anthony Traficanti attributed the growth to an increase in auto sales.

“I believe what you are telling me is a great indicator,” he said. “I don’t want to get overjoyed about it because who knows what could happen.”

The county also has a .25 percent tax for the Western Reserve Transit Authority. Revenue generated from that went from $8.4 million in 2014 up to $8.5 million in 2015.

George Zeller, a Cleveland-based economist, adjusted the totals for inflation and found the county saw a 51.4 percent increase from 2010 to 2015, but he notes the large increase is mostly due to the increase in the county’s tax rate.

“It’s good things are going up,” Zeller said. “[Consumers] are buying clothes, they are buying cars. Retail sales are increasing.”

Each month, the Ohio Department of Taxation releases tax distribution amounts to counties and local transit authorities. The latest release shows the December 2015 figures.

In December 2015, tax revenue from motor vehicle sales was $445,785 compared with $370,592 generated in December 2014.

For regular sales, revenue generated was $766,590 in December 2015 compared with $598,345 in December 2014.

TRUMBULL COUNTY

In Trumbull County, the 2015 sales tax revenue was $25.8 million, up from the 2014 revenue amount of $24.9 million. The county also saw a year after year increase in revenue: $20.7 million in 2010; $22.5 million in 2011; $23 million in 2012; and $23.6 in 2013.

Trumbull County Commissioner Frank Fuda also attributed the growth to more vehicle sales and an increase in tourism.

“It helps bring income and helps operate our county,” he said. “I don’t know the exact reason for the increase, I am just happy it did increase.”

Fuda would like to see the county’s tax rate of 1 percent increase by a 0.25 percent.

“We are going to have to,” he said. [The current revenue ] is keeping us afloat. It’s just enough to survive.”

Zeller’s review shows Trumbull’s sales tax revenue increasing by 15.3 percent from 2010 to 2015 when adjusted for inflation.

In December 2015, the county received $316,818 in motor vehicle taxes compared with $279,652 received in December 2014.

In regular sales, the county received $290,929 in December 2015 compared with $288,730 received in December 2014.

COLUMBIANA COUNTY

In Columbiana, where the tax rate is 1.50 percent, the sales tax revenue increased from $16.3 million to $16.8 million. The county has also seen consistent growth over the past five years going from $12.5 million in 2010 to $13.3 million in 2011 to $14.6 million in 2012 and $15.9 in 2013.

Zeller’s review shows the county’s sales tax revenue increase by 24.8 percent when adjusted for inflation.

The county received $254,471 in motor vehicle tax in December 2015 compared with $227,882 received in December 2014.

For regular sales, the county received $203,547 in December 2015 compared with $201,687 received in December 2014.

REASON

Overall, Zeller says the Mahoning Valley sales tax revenue has increased 32.7 percent when adjusted for inflation with a total increase of $20.3 million.

He notes that about $5 million is a result of the rate hike in Mahoning.

“All of the entities remain under pressure because of cut state [funds],” Zeller said.

More local investment over the past five years is pointed to as a reason for the increase.

More companies coming to the valley translates to more dollars spent here.

“Looking at that 2010 to 2015 time frame, we had on-going investment,” said Sarah Boyarko, senior vice president of economic development at the chamber. “Companies that are growing locally and expanding are spending money and using more services.”

Local investment over the past five years includes: the $28 million Anderson-DuBose Co. plant on Tod Avenue in Lordstown — a McDonald’s and Chipotle food and paper products distributor that had a ground-breaking in 2011; the $13 million Exterran oil and gas equipment plant on Salt Springs Road in Youngstown that opened in 2013, which is now indefinitely closed; and the $100 million Matalco Inc. aluminum billet plant on Tod Avenue in Lordstown that is set to open this year.

IMPACT

Sales tax revenues are a good indicator of the state of the local economy. The more disposable income, the better the economy.

“The majority continue to spend to drive economic growth,” Mokrzan said.

The big jump in sales leads to more money for local governments.

“The local governments are in better financial positions and they have the capability to do some extra things with these revenues,” Mokrzan said.