Sales Tax
Clark County sales tax revenue
2014 — $23.7 million
2013 — $22.6 million
2012 — $21.5 million
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Clark and Champaign counties saw sales tax revenues rise in 2014, another sign the local economy is recovering from the Great Recession.
Clark County collected more than $23.7 million in sales taxes last year. That’s nearly a 5 percent increase from 2013, when the county brought in more than $22.6 million. Champaign County collected more than $5.3 million in sales tax last year, less than a 1 percent increase from 2013.
Clark County Administrator Nathan Kennedy pointed to two factors for the increase — higher prices and economic recovery.
“The economy is still marching forward in a positive direction … People are feeling more comfortable to spend money,” he said. “Clark County doesn’t see the real highs nor the real lows. Most of the sales in Clark County are more regular staple items that people are going to buy regardless of how bad the economy is.”
While the U.S. economy is doing well, he said he remains concerned because Europe, Russia and China are struggling.
“Eventually that should have some impact in the states,” Kennedy said.
Clark County has a 1 percent sales tax and a half-percent sales tax, which officials voted in 2013 to extend for three years. That’s in addition to the 5.75 percent sales tax the state levies.
One of the county’s larger sources of sales tax revenue is from vehicle purchases.
Bill Marine said his dealerships in Clark County have also seen an increase in purchases this year.
The increase is due in part to pent up demand, he said, and an improved economy and interest rates.
“There are a lot of people who hadn’t been in the market for a few years since the meltdown, since ‘08, and that’s where we saw our increase,” Marine said.
He anticipates 2015 will be better than 2014, especially if gas prices remain low.
Clark County Auditor John Federer said it’s great that people are buying in Springfield and Clark County because it’s important to buy locally.
“Confidence is building. I think the economy is turning,” Federer said. “It’s definitely a result of the efforts that a number of people have made for lower unemployment in Clark County.”
The Clark County unemployment rate fell from 4.2 to 4.1 percent in November, according to the most recent state data released, the lowest level in more than a decade.
“People are working, people are spending money and investing in our community, and that’s a direct result of economic development,” Federer said.
Champaign County Clerk/Administrator Andrea Millice said she estimated the county would bring in about $5.2. million in sales tax, less than last year.
“This is over what we estimated but of course we were trying to be conservative,” she said.
The additional money will benefit all departments, she said.
Clark County commissioners have previously discussed reducing the half-percent sales tax. But Kennedy said that change would negatively effect the county’s finances.
“A 1 or 2 percent increase in sales tax does not cover the loss of a half-percent sales tax.”
For example, a 2 percent increase on $14 million is $280,000, he said.
If officials eliminated the half-percent sales tax, he said that would result in a $7.5 million cut.
Kennedy said the county can’t afford to reduce or eliminate the half-percent tax right now.
“Not at this present moment. We’ve lost money to local government funds, we’ve lost money to our investment earnings,” he said. “Those two items by themselves in normal years would have brought in close to $6 million or $7 million. Those items have been severely cut or annihilated.”
But he said if the state provides counties with more local government funds and interest rates return that could change.
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