Valley sales-tax increases show more consumer spending
By Kalea Hall
YOUNGSTOWN
More jobs, more income, cheaper fuel, less debt and better household wealth all lead to more consumer spending.
Nationally, these factors have led to increased consumer spending in 2016 and an expected moderate growth in 2017.
“Really, the U.S. economy has been leaning heavily on consumer spending,” said Mekael Teshome, PNC Bank economist. “When you have more and more people getting jobs, then you have more and more money to spend.”
Locally, the sales and use tax revenue increases in Mahoning and Trumbull counties indicate an increase in consumer spending from 2015 to 2016.
County 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.
In Mahoning County, during the first half of 2015, $18,585,577 was generated compared with $21,957,674 generated during the first half of this year, according to figures from the Ohio Department of Taxation.
A big part of that increase, however, is because the county increased the sales-tax rate by 0.25 percent, which took effect April 1, 2015.
Without the additional tax-rate increase, the revenue increase was about 3 percent, according to the Mahoning County Auditor’s office.
In Trumbull County, where the sales tax rate is 1 percent and has been since 2005, there was a slight year-over-year increase.
From January through June 2015, the county saw $12,887,738 compared with $13,329,422 received in the first half of 2016.
“It’s only up 2 percent,” said Adriano Biviano, Trumbull County auditor. “Years ago we were seeing 6 to 7 percent [increase].”
The county would like to be at a 6-to-8 percent increase, he said.
Trumbull County Commissioner Frank Fuda would like to see the county increase the sales-tax rate by at least 0.25 percent to make sure the county has the funds to run.
“Next year we have to be careful,” he said. “It should probably be raised a half-percent. We have to do something. We really do.”
At a quarter-percent increase, the county would bring in another $6 million a year.
“People don’t understand the sales tax and how much it is needed to run your county,” Fuda said.
In Columbiana County, sales and use tax for the first half of the year went down from $8,479,979 in 2015 to $8,234,744 this year.
George Mokrzan, director of economics at Huntington Bank, said consumer spending has been slowing on a month-to-month basis. Mokrzan forecasts moderate economic growth into 2017.
Consumer spending is “a cycle that fuels itself on the upside and unfortunately the same in the reverse side,” Mokrzan said. “It will be important to watch what the consumer does.”