Sales tax collections fall below expectations

“It looks like we have seen a dip in consumer confidence this month and last in relation to the sales tax numbers”
Andy Ouriel
Feb 18, 2014
Erie County commissioners seemed grateful, but not overjoyed, with the latest batch of sales tax figures.

Consumers buying taxable goods in Erie County this past November produced about $1.48 million in local sales tax income.

County officials just finalized November’s collection this month. The total fell about 3 percent short of the projections for November, made a few months ago.

It’s the second consecutive month in which a decrease of at least 3 percent — actual collection vs. budgeted amount anticipated — occurred.

“It looks like we have seen a dip in consumer confidence this month and last in relation to the sales tax numbers,” Erie County commissioner Bill Monaghan said. Sales tax helps funds many county services, including court, sheriff and maintenance operations.

2014 tax outlook
Erie County will collect a lot of sales tax money this year. Beginning this past October, shoppers buying taxable goods in Erie County have paid a bit more. In July, county commissioners voted to temporarily raise the sales tax rate for one year.

The increase is expected to generate and extra $7.2 million in 2014 for a yearly total of about $22 million. The additional funding is strictly earmarked to fund infrastructure improvements. The state’s portion of the sales tax also increased at the same time the county’s temporary tax spike went into effect.
 
Here’s a breakdown of the past, present and future tax outlook in Erie County:

•6.5 percent: Tax rate prior to October, with 5.5 percent going to the state and 1 percent going to Erie County.

•7.25 percent: Tax rate from Oct. 1, 2013 to Oct. 1, 2014, with 5.75 percent going to state and 1.5 percent going to Erie County.

•6.75 percent: Tax rate from Oct. 1, 2014 going forward, with 5.75 percent going to state and 1 percent going to Erie County.

 

2014 Erie County sales tax income
Actual collection to date: $2.96 million
 
•Budgeted amount to date: $3.07 million
 
•Up or down: Down about $105,000
 
•Year-end goal: $22 million
 
Note: Erie County officials finalize sales tax figures three months after the actual collection.
 
For instance, the November collection was finalized in February. All figures rounded.

Source: Erie County finance department

Comments

JD's picture
JD

This is what happens when you raise taxes. People buy less. Not a big surprise.

From the Grave

Or they buy the same things off of ebay(with free shipping)from out of state and then don't pay the tax later on their Ohio return.

Truth or Dare

Winter weather hasn't helped matters! Spending is down whilst the cost of utilities has increased, especially propane (not to mention rationed so they can ship elsewhere), groceries, gasoline, etc.. Folks need to conserve! Many aren't reporting to work due to Level 3 conditions, that or getting called off because of the weather! Most folks don't get paid to sit at home.

Can't stop Mother nature from throwing in a monkey wrench and messing with the economy, let alone the budgeting of future estimated tax $$$'s. I see that 1 yr. increase, increasing into 2 or more.

Perkins Resident

Since the raising of the sales tax, I make my purchases in other counties when I can. Great job commissioners.

IT'S ME

Like someone else said, EBay is GREAT! Recently I needed new headlight bulb, local auto stores wanted $50 for a set of silverstar ultra's, I got them on eBay for $35 \ FREE SHIPPING \ NO TAX!

Contango

Re: "The increase is expected to generate and extra $7.2 million in 2014 for a yearly total of about $22 million."

They're undoubtedly using a "static accounting" method.

Authorities wrongly 'assume' that raising the tax will have little-to-no affect on consumers' buying behavior.

Actual tax revenue is seldom what was projected.

A one yr. increase? Watch it become permanent.

Rosa

Commissioners should take a cut in pay....