Butler County collected $37 million in 2014 and proceeds rocketed to $59.4 million last year. Warren County saw similar growth with revenues jumping from $34.6 million to $55.5 million over the past decade.

Profits from the sales tax collections allowed Warren County in the past decade to spend $58.8 million from it to pay for its new jail complex and a tax increase request was not needed from taxpayers.

Credit: Nick Graham

Credit: Nick Graham

Projections are conservative in future years

The Butler County commissioners budgeted sales tax conservatively at $57 million for this year, after revenues only increased $595,996 or 1% to $59.4 million last year — after several years of sizeable hikes.

Butler County Administrator Judi Boyko said she isn’t sounding an alarm but noted, “macro economics of the country indicate that spending is leveling off.”

“Right now there is not a large new retail first-to-market that’s coming to Butler County that I’m aware that’s been announced or that’s event in the pipeline,” Boyko said. “With the last two years being right around $59 million, I could be way wrong, but it’s something that we’re monitoring, because don’t want to be in a position where we have plateaued and we’re not strategically evaluating it.”

The two largest retailers to open in the county recently were the new Liberty Twp. Costco that opened in November 2022 and Bass Pro Shops which debuted in West Chester Twp. at the end of February last year.

Although counties aren’t privy to sales numbers by source, the county sales tax bottom line appears to have benefited from the Costco opening, since sales tax revenues jumped nearly $3 million during their first year in business.

Sales tax revenues are distributed by the state three months in arears so collections from purchases made at the new Bass Pro wouldn’t have hit the county coffers until June. Boyko said they haven’t fully realized the impact of that popular retailer yet.

Butler County is one of three counties in the state charging the lowest sales tax at 6.5%, the bulk of the counties — 50 of the 88 — charge between 7.05% to 7.5%. Warren County’s current rate is 6.75% but consumers have seen a drop recently, since the special five-year quarter percent they were paying for the new jail complex was retired in 2023.

“The jail revenue was a quarter percent increase in sales tax that we had on the books for five years and we guaranteed to the community — and we did — that we would sunset it,” County Administrator Martin Russell said. “We sunset a quarter percent of sales tax at the backside of ‘22, it just so happens since it’s three months in arrears we still collected a couple months inside of ‘23, even though it wasn’t technically on the books.”

Credit: Nick Graham

Credit: Nick Graham

Credit: Nick Graham

Credit: Nick Graham

The largest one-year leap in both counties came in 2021 when trillions in pandemic relief came pouring in from the federal government. Sales tax receipts in Butler exploded 18% with an additional $8.1 million collected for a new total of $52.7 million and there was a 12% hike in Warren bringing proceeds up $5.4 million to $50 million.

“In 2020 we were all scared, we were to the point where we were cutting our projections by 25 and 50%,” Russell said and later added there is another huge unknown going on right now post-election, “I think what’ll be interesting to see is what does or doesn’t happen with Trump in office. Does that scare everybody or does it make everybody open up their wallet.”

At the outset of the pandemic Butler County officials projected a $20 million general fund shortfall so the commissioners agreed to empty the $12 million budget stabilization fund and use $1.5 million from a reserve fund to help close the revenue gap. They also asked the office holders to cut 4.14 percent from their total approved budgets for the year.

The freefall never materialized and Russell said another factor that influenced the positive sales tax bounce was a U.S. Supreme Court decision that allowed states to collect sales tax from out-of-state online retailers and catalog sales, “so you kind of have a double positive whammy that comes in.”

Inflation has also impacted spending but Boyko said it is difficult to gauge how that has hit the revenue source that represents 40% of the county’s general fund.

“You can look at it two ways, the cost to purchase may be higher but people might not be spending as much,” she said. “They might cancel each other out.”

Investments helping counties

Sales tax and huge interest income on investments have bettered the bottom line in both counties as well. Butler County earned $3.3 million on investments in 2022 and a whopping $15.4 million last year, a 358% increase. Similarly investments in Warren County increased 237% from $3.3 million two years ago to nearly $11 million last year.

Tax collections directly correlate to how much counties can do to improve things for residents, for instance both counties gave their residents property tax breaks in recent years. Healthy revenues can also help create new jobs, a prime example is the $10 million investment the commissioners agreed to recently to help build the new Millikin Road interchange at Interstate 75 in Liberty Twp. Early estimates show this project, when fully phased out, is going to be worth $388 million in new investment.

And just because there don’t appear to be any more “big box” retailers on the near horizon, doesn’t mean sales tax will suffer. Economic development gurus in both counties say there are plenty of opportunities for revenue growth because there is still room for development countywide.

Generating new revenues

The newly reconstituted Butler County Port Authority, now known as the Butler County Finance Authority, is in the process of examining how the county’s three airports can become magnets for growth, given there are vast amounts of virgin acreage. BCFA President and CEO Joshua Smith said they have embarked on a Butler County Aviation Plan because “that’s low hanging fruit in terms of driving additional income tax, sales tax in Butler County.”

“This initiative focuses on maximizing the value of airport assets, including over 450 acres of adjacent undeveloped real estate. The plan explores the highest and best use of this land while examining the growing potential of Advanced Air Mobility,” Smith said and later added, “these advancements are creating desirable jobs in engineering, manufacturing, software development, infrastructure planning, and maintenance while driving investments in sustainable aviation and clean energy solutions.”

Warren County has always dubbed itself “Ohio’s largest playground” and Development Director Matt Schnipke ticked off a number of new developments in their stable of sports venues that bring in droves of participants and fans, fueling sales tax receipts.

There’s the Cincinnati Open tennis tournament — a $260 million renovation plan is underway in Mason — expanding from one week to two, the LPGA tournament that was hosted here last year, the sports complex — the five year projection was 700,000 people annually and they are on pace to bring in 1.6 million people — and the new indoor Renaissance Event Center in Middletown is in the works, to name a few.

Not to mention many “mixed use” and job-generating developments popping up countywide, taken altogether Schnipke said these things better people’s lives, “the more business you can attract it can help keep residential tax burdens low.”

“About 50% of the county’s sales tax comes from out of the county, people that are coming here for a tournament or to go shopping or whatever, they don’t live here,” Schnipke said. “We get the benefit of collecting those taxes without having to provide core services to those folks as residents.”

Butler County is the seventh largest county in the state with an estimated 393,043 residents as of 2023 and Warren County comes in 10th with 252,148. Both areas are still in growth mode and Butler County Development Director David Fehr said given the location between Cincinnati and Dayton “it’s seen as an advantage so we’re going to still get an awful lot of inquiries in this area just because of the geographic location of folks, making sure they can find employees.”

County commissioners tend to get nervous when revenue streams are impacted but Butler County Commissioner T.C. Rogers and Warren County Commissioner Dave Young both said they aren’t losing any sleep.

“You always want growth and you want sustainable growth,” Young said. “We’re growing that aspect of the county a couple percent a year I’ll take it because that means we’re growing at a sustainable rate and it’s not a feast or famine situation.”