Cortland County made a comeback with sales tax revenue this spring as the coronavirus mandates were lifted and people began getting their everyday lives back to normal.
Sales tax generated from agriculture, petroleum, construction and the retail industries, increased for the first fiscal quarter of this year — which includes March, April and May — compared to the first fiscal quarter of last year, said county Finance Director Andrea Herzog.
Although the retail revenue as a sector was up from last year, some retail businesses like automobile dealerships have yet to return to their pre-pandemic numbers.
The state’s Taxable Sales and Purchases Quarterly Data shows that Cortland County’s automobile sales for March through May of 2021 reached over $34.5 million in taxable sales, compared to around $17.4 million that same time in 2020 and $26.5 million in 2019.
“We’re definitely still down (this year), but for March, April, May, we’re doing better than last year, because obviously, the pandemic was going on. But, we’re quite a bit worse than in 2019,” said Jesse Dovi, owner of Dovi Motors in Cortland.
A global shortage of semiconductors slowed down production for major suppliers, like Ford, for the past few months, Dovi said, leading to fewer cars on their lots to sell.
“We are still selling vehicles because people have ordered stuff, so our inventory is trickling in — two or three cars here, one there,” Dovi said. “But it’s going to be a very different year for us for sure. The automobile industry had an unbelievable start to 2021, but it’s probably going to have a really crummy finish — almost similar to last year in terms of global auto sales.”
The county originally budgeted for $28.36 million for countywide sales tax for the 2021 fiscal year, but total sales tax receipts through August were $20.67 million — 22% greater than 2020 sales tax for the same period. And about 18% greater than 2019.
“I am not surprised sales tax receipts increased from 2020, with the increase in gasoline prices, restaurants and bars opening and organizations being creative and coming up with new ways to provide services while still maintaining social distancing,” Herzog said.
Herzog said the utilities sector and the banking and investing sector came in lower than in 2020.
“With individuals going back to work, utilities are down due to a reduction in electric usage and program subscriptions compared to 2020 and are more in line with the same quarter in 2019,” Herzog said.
Utilities were down $1,782,719 compared to the same quarter in 2020, and banking and investing was down $249,374.
“Banking being down from 2020 is not a surprise due to interest rates being so low,” Herzog said.
The Federal Reserve made two emergency rate cuts in March 2020 in response to the coronavirus pandemic, and interest rates were lowered because the nation’s economic growth was low. The Federal Reserve has said it will keep interest rates low for several years to allow the unemployment rate to recover and for inflation to increase slightly.
As people begin to save their money on low interest rates, they’ll need to pick and choose where to spend.
“It seems like they’re going to prioritize production on those, which people are excited about,” Dovi said. “It’s definitely going to be a lean year for us. Next year has the potential, but I think it’s going to be well into next year before they get this shortage problem resolved.”