Rare mega events such as a visit by singer Taylor Swift to Cincinnati this past summer brought a big jump in Butler County sales tax, but officials say banking on windfalls like that and others that happened this year is not prudent.
When the mega star came to the region, estimates show she had a $90 million impact to Greater Cincinnati. Butler County is boasting an estimated 9.5% sales tax increase due in part to her two-day “Eras” tour. Hamilton County, home to Paycor Stadium where she performed, is expecting a 33% sales tax leap.
County Administrator Judi Boyko told the commissioners this week she has preliminary sales tax numbers for October and it appears Swift may have helped boost the collection from $4.8 million last year to an estimated $5.3 million. Sales tax collections have a two-month time lag, so October receipts reflect July sales, which were $460,493 more than a year ago.
“I want to put some context to it because I think there’s some anecdotal data that’s important,” Boyko said. “From the limited research I was able to do, Butler County benefited tremendously. Taylor Swift was in Cincinnati June 30 and July 1. I’m only bringing this to your attention so people don’t think this is setting a new bar in sales tax collections.”
The Journal-News studied sales tax receipts recorded by the Ohio Department of Taxation, and they show Butler County’s sales in June — which were received last month — totaled $5.2 million, which is $228,913 more than a year ago.
“With those numbers, we welcome Taylor Swift back to the Cincinnati area at any time and we anxiously await her next song for her next ex-boyfriend,” Finance Director Dave McCormick said, referring obviously to all the hype about the apparent romance between the pop star and football phenom Travis Kelce, tight end for the Kansas City Chiefs.
The collections for November are also expected to be robust, stemming from the Voices of America Country Music Festival in August. An estimated 60,000 people flocked to the four-day music festival in West Chester Twp. and early on fest organizers estimated a $40 million economic impact to the region.
The concert will return next August and it is hoped it will become an annual event. The township trustees are paying the UC Economics Center $17,000 to perform an economic analysis. The preliminary report is due Oct. 27.
The county is the only local entity that collects sales taxes, and this year, including the estimated amount for October, totals $49.1 million compared to $46.3 million collected during the same timeframe last year. Other general fund revenues are also following a new path, namely income earned from investments. Soaring interest rates have produced a 287.5% increase, from $1.6 million through August of last year to $6.35 million through the first eight months of this year.
Boyko said they can’t rely on that as a staple, “building your budget where you’re anticipating continually getting $6 million, $7 million, $8 million isn’t a good practice.”
“Local government can’t rely on income earned on interest,” Boyko told the Journal-News. “Because the economy is cyclical, when we invest our money and we get interest, we’re already at $6.4 million and it’s likely we’re going to get closer to $7 million, that’s significant… but conversely when the economy was really robust there wasn’t high interest.”
The county also stands to get a healthy boost in property tax next year, if state legislators can’t accomplish tax relief they have been fighting for. The house is scheduled to vote on a measure today that would cut a 37% property value hike to around 24%. HB 187 must be passed out of the house, get approved by the senate and signed by the governor, but there are many obstacles to overcome.
County Auditor Nancy Nix gave taxing entities a very preliminary rough estimate of what the tax windfall would be if everything stays status quo, it’s $5.7 million for the county’s share. Boyko has said they haven’t penciled the increase in the 2024 budget yet.
Commissioner T.C. Rogers told the Journal-News he’s looking beyond the county borders where budgeting is concerned, “I’m for staying on course until there’s an actual trend line.”
“We’ve got some positive things happening in the local economy which we’re encouraged about, but you can’t be that comfortable when the national and world news is being reported,” he said. “We don’t know what this economy is going to be, it sure looks like there could be downturn, how much of a downturn I don’t know, but it could absorb whatever positive increases we’ve had.”
The commissioners have three budget hearing sessions scheduled with other office holders, department heads and independent board beginning Oct. 23. They passed a structurally balanced $120.3 million general fund tax budget this summer but tweaks will be made during the hearing process.
McCormick said the anomalies in the revenue streams this year — like country music festival even though it is expected to be annual going forward — won’t likely make the final cut.
“Governmental budgeting really necessarily needs to be very conservative,” McCormick said. “We wouldn’t want to budget revenues that we are not really assured of getting. I think there would need to be some significant history, a number of years of history.”
