An Outlook

Back at the beginning of October I wrote a column that reported the county sales tax figures from the beginning of 2009 through September of last year. As most of you know, Door County (like most of the counties in Wisconsin) collects one half of one percent tax (0.005) on retail sales where sales tax is applicable. Businesses pay the sales tax they collect to the state and then the state distributes the counties’ portion back the counties on a monthly basis.

One thing we must always keep in mind when we look at county sales tax collections is that businesses pay sales tax to the state at different times and late collections are credited to the counties in the month they are collected. In other words, if a business that pays its second quarter sales tax (normally due at the end of July) in September, that payment will not show up at the county until October (and will therefore be reflected in the October distributions).

Thus, because of this reporting method, the state’s distributions to the counties are an unreliable measure of economic activity at the county level in the short term. But because the distribution method is consistent, we can look at the sales tax distributions over a long term and get a sense of how the county’s economy is performing.

So now, with 2009 at an end and all the county sales tax distributions reported on the Wisconsin Department of Revenue’s Web site, let’s take a look at how Wisconsin and Door County performed. Let’s start with the data for the state. The following table shows all the county sales tax distributions to counties that collect the tax for 2009.

As you can see in the year end totals, county sales tax revenues were down over $20 million dollars in 2009 compared to 2008 and over $9.7 million from 2007. The drop from 2008 to 2009 is 7.1 percent.

More important, however, is how much less money was spent in local economies during the past year. When you do the algebra using the numbers above [(0.005)x = 20,490,923.01 ] the result is a drop of $4,098,184,602. That’s almost $4.1 billion less spending compared to 2008.

So now let’s take a look at Door County. The following table shows the state’s distributions to our county in 2009.

In Door County’s case, the year end totals show a decrease of $239,147.02 from 2008 to 2009 and a decrease of $176,170.93 from 2007. The drop from 2008 to 2009 is 7.5 percent – somewhat worse than the statewide drop.

Keep in mind that county sales tax collections go into the county’s general operating fund, so the county board has just under $240,000 less to work with in 2009 than they did in 2008.

And, of course, when you do the algebra on these figures like we did with the state figures, the result is a staggering $47,829,404 less spent in the county this past year than the preceding year.

Here’s another way to look at this drop: if you divide that almost $48 million by the approximate population of the entire county (30,000) you discover that this drop represents a reduction of $1,594.31 for every man, woman and child.

But let me close with one positive amid all these gloomy figures. When you look at Door County’s sales tax numbers for 2009 note that in two of the final three months (October and December) revenues were up over both 2008 and 2007.

Maybe we are on the way to a recovery.