County sets sales tax record amid pandemic

Even though the local economy is struggling to reopen in the face of coronavirus fears, by at least one measure business is booming in Ozaukee County, as sales tax collections were the highest since last November, county officials report.

May tax collection estimates reported in July totaled $836,825, well above the $767,576 reported in May last year and $662,776 in May 2018. 

“It was our highest May ever,” county Administrator Jason Dzwinel told the County Board last week. 

Through the first five months of the year, the county averaged $685,000 in sales tax revenue per month, ahead of last year’s average of $667,326 over the same period.

The county budgeted $9.1 million in sales tax revenue for 2020, or an average of $758,910 per month.

Even though the monthly average is behind the budgeted average, officials said they feel the county is on pace to meet its budget, being that the first four or five months of sales taxes are the lowest of the year, increasing during the summer and in the holiday shopping season.

Sales tax revenue in 2019 totaled $8.86 million.

May’s collections were the highest since last November’s $840,208 and $902,946 last August.

While there is some concern that county revenues could see a downturn in other areas, county officials said they remain generally optimistic.

Last month, Gov. Tony Evers ordered state agencies to cut $250 million from their budgets for the coming fiscal year, which ends in June 2021, a step made necessary by the economic shutdown brought on by concerns over the Covid-19 pandemic.

Evers’ order directed the Department of Administration to use a similar approach used earlier this year when he cut $70 million for the fiscal year that just ended. Most of those cuts came from the University of Wisconsin system.

County Administrator Jason Dzwinel said he does not anticipate Evers’ cuts will drastically affect the county.

The largest amount of state funding comes to the county’s human services areas such as health and child services.

Those are unlikely to see any cuts, he said.

“The Wisconsin Counties Association assures us there is some stability in those areas,” Dzwinel said.

One area where state aids could see a dip is transportation.

Supr. Tom Winker, who runs a trucking business and is chairman for the Town of Belgium, said gas tax revenues were down 30% in recent months, which could affect county road funding. 

Dzwinel, however, said the county receives about $1.5 million per year in transportation aids.  

“Even a 10% cut is manageable. Things aren’t as dire as predicted,” Dzwinel said. “Our budget is solid right now.”

Helping the county weather any prospective economic storm is a healthy unassigned fund balance, sometimes called the county’s rainy day fund, that was $8.23 million at the end of 2019, according to a draft audit presented to the committee at the same meeting. 

That represents 30.6% of the county’s total annual general fund expenditures.

The county’s Policy and Procedures manual mandates an unassigned fund balance of at least 20%.

“These are the exact times why we want to maintain a strong fund balance,” Dzwinel said.

And while the coronavirus has had a devastating effect on the economy, officials said they are mostly optimistic.

“The stock market is booming, so people feel comfortable there and the Paycheck Protection Plan really helped pump money into the economy,” Committee Chairman Paul Melotik said.

Many of the expenses incurred by the county while dealing with the coronavirus will be reimbursed by federal and state sources, Dzwinel said.

Both the Lasata Senior Living Campus in Cedarburg and the Washington Ozaukee Public Health Department have racked up large expenses while dealing with the virus and have applied for reimbursement.

Dzwinel said the Sheriff’s Office recently received about $40,000 to pay for an ultraviolet light cleansing device used to clean jail cells and personal protection equipment.

Meanwhile, county Human Resources Director Chris McDonell told the committee he is developing a hazardous pay plan for employees who have been put in harm’s way during the Covid-19 crisis.

Those would include people working in areas of health care, public safety and public health, he said.

The hazard pay would likely work the same way as the county’s bonus pay system, he said, and would be one-time payments likely ranging from $250 to $1,500, reflecting the amount of exposure the employee had.

The funds awarded would also likely be eligible for reimbursement from the state and federal sources, he said.

He said a draft plan would likely be presented to the committee next month.