Through the years, I have devoted thousands of words to the economy of our peninsula. Typically, I focus on numbers and reports that appear from various state agencies and use this information to gauge where we stand, which direction we are headed, etc.
One of the most interesting aspects of the peninsula’s economy (to my mind, at least) is that we are significantly more self-contained than most regions of the country (or state) and that the elements that drive our economic well-being are heavily weighted into a small number of industries. And while I acknowledge other industries, the reality of our economy is that the health and vitality of the tourism industry (packed into a short few months) defines our economic well-being for an entire year and often longer.
Through the years, the chief source of information I have used in my reporting has been the county sales tax figures as reported on the Wisconsin Department of Revenue’s Web site. As we should all know, Door County (along with most of the counties in Wisconsin) collects one half of one percent (0.005) sales tax on each taxable transaction on the peninsula. This tax is collected by the state from retailers, as part of the state’s overall sales tax collection, and then is redistributed to the counties on a monthly basis. In Door County’s case, this money goes to the County Board and is included to offset costs associated with the administration of the county.
More recently (since May of 2007), Door County collects a “room tax.” This tax is collected exclusively by lodging establishments (resorts, hotels, cottages, etc.). Monies from this tax go to the generals funds of the local municipalities in which the funds are collected (30 percent of revenues), the Door County Visitor Bureau which markets Door County to the rest of the world in order to bring more overnight stays on the peninsula (67 percent of revenues), and the remaining funds (3 percent of revenues) are used by the Tourism Zone Commission for administrative costs associated with collecting the funds.
Through the room tax and record keeping of the Tourism Zone Commission, Door County has access to valuable statistics like occupancy rates for any given month that are real and quantifiable and allow us to compare how well our lodging industry (and tourism) are doing from month to month and year to year.
So between county sales tax collections and county room tax revenue (along with occupancy rates) it is now possible to capture a fairly accurate portrait of the vitality of the peninsula’s tourism industry.
There is, however, an important distinction between how these two sets of numbers are reported. County Sales tax distributions are reported in exact figures on a monthly basis. In other words, if a retailer (or retailers) doesn’t pay their August sales tax to the state until November, the amount they pay won’t show up until the December disbursements are reported.
In the case of room tax collections, the Tourism Zone Commission initially reports “unadjusted numbers” for any given month. Any collections for a month that are received after the reporting deadline are credited back to the month to which they apply. In other words, if a lodging establishment doesn’t pay their June room tax collections until August, the amount collected will be added back into the June room tax figures rather than credited to August collections.
Despite the differences, both systems work and are important in providing an overall picture of our tourism industry. Once adjusted, the room tax figures provide an extremely accurate portrait of occupancy rates, etc. for each month of the year. We just have to wait longer for the complete picture. And county sales tax figures provide an ongoing portrait of the health of the county’s retail sector but, because they are unadjusted, they need to be considered over a broader period of time than any one month.
And all of this brings us to the county sales tax figures for this year (spanning collection from January through September). This year, Door County has received $2,016,711.55 in sales tax distributions. During the same period last year, the county received $2,215,327.79. This represents a decrease of $198,616.24 or 9 percent.
Given the condition of the national economy, and the retail sector in particular, this decrease is probably not surprising. But just so you understand the ramifications of this decrease consider that this means the County Board, to this point in the year, is looking at almost $200,000 less to work with in their budgeting process.
And if you want a real eye-opener, how about this: the $198,616.24 decrease in county sales tax collections translates into a $39,723,248 reduction in spending retail spending in the county.
This is not to say that Door County is that much worse than the rest of the counties in the state. Overall county sales tax disbursements from the state are down $14,947,850.87 to this point in the year, representing a 7 percent decrease. And when you do the math, this means that retail spending (almost all the counties collect the 0.005 sales tax) in the state is down $2,989,570,174.
Of course, the retail sector in most of the other counties can still look forward to the Holiday shopping season (traditionally the strongest retail period) and Door County’s strongest retail season is almost gone.