Reasons to be Optimistic

In the doldrums of a winter without snow (albeit, a warm one), with so little activity of any sort on the northern end of the peninsula, it is nice to have some good news to report.

As you all know, I try to regularly report the county sales tax numbers in this column. These figures derive from that half percent sales tax Door County (and most other counties in Wisconsin) charge. 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 then 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.

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 the previous 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 2011 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.

For some time, these figures have been grim, as collection steadily dropped, which, in turn, means that spending on the peninsula has dropped. And in a very small, largely insulated economy like Door County, this has far reaching implications.

Halfway through 2011, I was happy to report that for the first time in a while, Door County’s sales tax revenue had increased. I am even happier to report that at the end of the year, sales tax revenue continued to increase and that last year was Door County’s best year since 2008.

As the table below shows, tax revenue increased by $122,083.53 over 2010, an increase of 4 percent (note that halfway through the year the increase over 2010 was 3.3 percent). And, when you do the math (0.005x = $122,083.53) this means that $24,216,706 more was spent on the peninsula last year!

Looking forward to this year, if we can manage the same dollar increase as in 2011, we will be almost back to where we were in 2008 and will surpass the total county sales tax we collected in 2007.

When you combine this news with the recent news of Jim Olson Motors opening a Chrysler dealership in the old Bergstrom building in Sturgeon Bay and the news of Palmer Johnson landing several contracts for new yachts, there is significant reason to be optimistic again about Door County’s economic outlook in the coming years. Work still needs to be done, but recovery seems to be underway.