Less people going out means less sales taxes for counties

This post sort of supplements the other one, as it also deals with retail sales in Wisconsin. But this one is going to widen out to taxable retail sales throughout Wisconsin, and it's going to discuss a couple of findings that Forward Analytics released earlier this week.

The organization looked at sales for March and April, as COVID19 broke out and many Wisconsin businesses shut down, and compared the totals to what the numbers were in March and April of 2019. Overall taxable sales were down 10.5%, and you can see the significant shift away from tourism-related industries and brick-and-mortar types of consumer spending, and into online sources and products to be used around the house.

There also was a wide variability among Wisconsin counties. Some counties actually continued to see increases in sales, but one tourism-heavy county had a drop of more than 30%, and the state's high-population counties suffered from no sports or other entertainment events going on for those two months.

Figure 2 on page five shows changes in county taxable sales ranged from a decline of 31% in Sauk County to an increase of 7% in Burnett County. In 14 of the 66 counties studied, taxable sales were higher in March and April of 2020 compared to the same months in 2019.

After Sauk County, the counties of Dane, Milwaukee, and Brown had the largest sales declines, ranging from -14.8% to -16.4%. These are three of Wisconsin’s most populous and urban counties and, along with Kenosha and Waukesha counties, had the most positive cases of Covid-19.

As you can see here, the counties that had taxable sales growth were rural places that likely don't have high tourism totals in March and April, and Forward Analytics indicates that some of those places had wholesale retail that shipped high amounts of product as people were homebound.

I'd be intrigued to see what these numbers look like for May, partially because we get to see whether we fell further back as the Summer tourism season began, and to see what differences there may have been around the state due to different levels of Safer at Home restrictions.

But what we do know is that this decline is going to hurt these counties' budgets for this year. They didn't count on such a drop in sales tax revenues for this year, and with no plans to increase shared revenues or property tax limits for these counties, it may be difficult for those communities to make ends meet through the end of the year. There is some CARES money that has gone down to local communities via the state, but much of that is to handle the extra medical services that have resulted from the COVID-19 pandemic.

Maybe Wisconsin saw large increases from retail sales like the rest of the country did for May. But remember, that still left US retail sales at a level that was 8% below where it was in January. This would likely put Wisconsin counties in the hole again for that month compared to May 2019, and time is starting to run short before cities and counties have to put together their 2021 budgets.

Wisconsin has been fortunate to avoid the recent increases in COVID-19 cases that we're seeing in the Southern half of the country, so maybe things will improve as the Summer goes on. But check back on the local sales tax returns going forward, because with no Brewers, no Summerfest, and many people still cutting back on travel, a lot of places that generate sales tax revenue aren't going to be generating sales near what we've been used to seeing. And that could mean a lot of cuts of many types of services at the local level if there isn't any bailout from DC or Madison.