Sales Tax - Putnam Sentinel
The above graph shows the total collected in sales tax for the 4th quarter of 2017 as compared to the same time period in 2016. For October through December of 2017, a total of $1,147,346.37 was collected in sales tax, an unadjusted increase of $82,461.75 over the same time period in 2016. This information is reported by the County Auditor Robert Benroth’s Office. The three-month delay provides for a correct accounting of total receipts. (Graph, Putnam Sentinel/Martin Verni)

PUTNAM COUNTY — Generally speaking, the collection of sales tax offers an indicator of local economic conditions. When residents and businesses are doing well financially, they tend to spend more money, which then generates an increase in the amount of sales tax collected.

By this measure, Putnam County’s economic conditions continue to do well when compared to the previous year. The total amount of sales tax collected in 2017 was $4,607,929.25. This represents an increase of $290,870.48 over 2016. When an inflation rate of 2.1 percent is factored into the equation, the county saw a year-over-year increase of $200,212.25 in 2017 dollars. Not all of the collected funds stays in the county, five and three quarters of a percentage goes to the state.

When speaking recently with John Schlumbohm, Mayor of Pandora and candidate for Putnam County Commissioner, he mentioned the possibility of reducing the county’s sales tax rate should collections continue to do well. A question on this possibility was posed to current commissioner, Michael Lammers. Citing past droughts and other periods of financial difficulty, Lammers spoke to the need to prepare financially for any economic downturn that may come, saying, “If there’s a fiscal surplus, and you’re building up a reserve, what we need to decide on is, what reserve is safe?”

“Now in the business world,” Lammers, himself is a small business owner, continued, “You look at six months to 12 months of expenses paid…[In the public sector] it’s how much reserve is needed. That’s a number I don’t have. I would depend on [Auditor Robert Benroth] to give me that number…Now, just sheer numbers, there was a $900,000 surplus in the budget last year, and one quarter of a percent sales tax is roughly $800,000…But again, I’m going to defer to [the county auditor] because he has a much better [idea of what kind of reserve is appropriate].”

The question on a possible sales tax reduction and how much of a reserve the county might need was then posed to Auditor Robert Benroth. “We do always look at it,” Benroth said, “And, we shouldn’t be taking more money than necessary.” He then pointed out that the county sales tax rate is lower than the maximum rate of seven and a quarter percent allowed by the state. Under Benroth’s watch, it was reduced to seven percent in 2009. This also makes Putnam County’s sales tax a quarter of a percentage lower than similar and nearby counties. “I didn’t feel we needed it,” Benroth said of the 2009 reduction. “We had paid all of our debt and the county was in good fiscal shape.”

“That quarter of a percentage is a rainy day fund,” Benroth continued. “Because we have that option to raise [the sales tax] if necessary. We’ve been very frugal and have been able to keep that off. We can always put it on, but if it’s not needed, we shouldn’t do it.”