An Outlook

The holidays are past, and we are now into a new year. While it is always wonderful to think that the warmth of the holidays will last throughout the year, our reality is that reality returns. And I suppose, I may as well be the one to get us started on our return.

By now, everyone knows that I enjoy looking at numbers and statistics and then extrapolating trends, themes, or truths whenever possible. And the one set of numbers I regularly report in this column is the county sales tax figures. These figures derive from that half percent sales tax Door County (and most other counties in Wisconsin) charges. Merchants, innkeepers, restaurateurs, etc. collect this tax and submit it to the state (along with the state sales tax of 5 percent) and the state redistributes the county tax portion back to the appropriate county. These distributions can be found – broken down by county – on the Wisconsin Department of Revenue’s website.

As I have pointed out before, one of the things that is important to keep in mind when you look at these distributions is that the total for any month reflects exactly what was collected during that month. Each individual merchant (or innkeeper, or restaurant owner, etc.) may have differing deadlines for when the tax is due to be paid (i.e. monthly, quarterly, etc.). Thus, comparing January 2010 to January 2009, for instance, doesn’t provide any clear indication of an individual county’s economic health.

Looking at a broader picture of county sales tax collections, however, can provide at least some indication of the economic health of a county.

As you may remember from previous columns where I reported the Door County sales tax figures, the past few years have not been good ones for our peninsula. Earlier this year I reported that half way through 2010 Door County’s sales tax collections were already down $32,346.44. And because this tax is one half of one percent (0.005) on each taxable transaction, that meant that as of June 30, 2010, $6,269,288 less was spent on the peninsula compared to the same period in 2009

So, with all of the above as background we come to the county sales tax figures for all of 2010. The table below shows the county sales tax distributions for each month during the past four years. Remember that comparisons between individual months are not particularly relevant and that what really matters are the totals at the bottom of each column.

Door County Sales Tax Figures

Unfortunately, the second half of the year was no better than the first half. When you compare 2010 to 2009 you see that sales tax revenues decreased by $71,020.33. And when you do the math you realize that this means $14,204,066 less was spent on the peninsula. When you compare 2010 to 2008, the decrease in sales tax revenue is $277,796.12, which translates into a $55,559,224 decrease in spending in Door County.

What you have to realize when you see these numbers is that this is money that disappears from our economy, and as I have pointed out many times, our peninsula’s economy is a small, largely insulated economy. So think of it this way: if our county’s population is roughly 30,000, then that decrease from 2008 to 2010 in spending means each resident has seen a net loss of $1,851.98. This, of course, is an over simplification. In actuality, the loss is much higher because of what economists refer to as the “multiplier effect,” which takes into account local spending and reinvestment.

And then there is the matter of rising expenses, which make any loss much larger.

There are many reasons, of course, for these dramatic drops; most notably the struggles of the national economy. But this trend is going to need to be reversed, and it will need to be reversed soon. Door County is going to need to create jobs and these jobs need to provide an income people/families can survive on for 12 months (and I am NOT referring to increased employment offered by a Super Center or any other employer of similar ilk).

The peninsula’s economy begins and ends with tourism, and the Door County Visitor Bureau (DCVB) has worked hard to bring people to the county. Unfortunately, the past few years have shown us that just bringing bodies to the county is not enough. More is going to have to be done, and this time the onus is not just on the DCVB…it is on all of us.