Study: County will see revenue loss for 2020, 2021July 13, 2020
By CANDY NEAL
Dubois County should weather this economic downturn fairly well, though it will see a decrease in revenue, according to a study conducted by Ball State University.
In the study’s ranking of how well counties will recover, with No. 1 being the worst, Dubois County ranks No. 75 of Indiana’s 92 counties.
“Dubois County should weather this relatively well compared to some other counties who are going to do some very significant reductions in expenditures,” Jeff Quyle, president and CEO of Radius Indiana, told the Dubois County Commissioners.
Quyle and Ed Cole of Dubois Strong shared the findings with the commissioners last week. Commissioners President Chad Blessinger requested the presentation since the county is looking at its finances and what it can and cannot afford to fund.
“I thought this was timely,“ he said, “especially since we’re considering future projects like the justice center project. This is information we need to know, where our revenue impact will occur.”
The study was done in June and was based on numbers that were available in May and early June. Researchers do not expect full economic recovery to happen before 2022. So the study is giving projections for 2020 and 2021.
The study looked at five scenarios for the way the gross domestic product, or GDP, could recover between now and the end of 2021. The GDP is total monetary or market value of all the finished goods and services produced within a specific time period. It provides an economic snapshot and is often used to estimate the size of an economy and growth rate.
The five scenarios show Indiana’s GDP increasing and decreasing by different amounts, depending on the way the economy recovers. The case scenario shows the GDP hitting a bottom and bouncing back quickly, which forms a V shape on Ball State’s economic graph. The worst scenario shows the GDP decreasing and almost flatlining at that decreased amount, which forms an L shape on the graph. There is also a projectile that makes a V shape with a hangover, a Nike swoosh shape and a roller coaster shape. The five scenarios are referred to by the shape names throughout the study.
“Some of them are a quick recovery,” Quyle said. “Some are a bumpy recovery. And some are a long, slow, almost non-recovery.”
Ball State predicts that for 2020, the state GDP will decrease by between 2.5%, which is the V shape, and 7.2%, the L shape. For 2021, the range shows the GDP decreasing by 2%, which is the roller coaster shape, to growing by 2%, the V shape.
Based on Dubois County’s financial information, researchers looked at tax revenue losses for 2020 and 2021, comparing them to 2019’s revenues. They did the same for the other counties in Indiana. Quyle extracted information for counties in this area and presented that to the commissioners.
Dubois County’s projected loss ranged between $1,119,493 and $3,200,370 for 2020, and between $192,984 and $2,654,171 for 2021. That includes losses in gaming, innkeeper’s, vehicle excise and local income taxes. This does not include property taxes, Quyle said.
Quyle gave the breakdown for each revenue category. Those loss projection ranges are:
• Local income tax: $473,231 to $1,362,904 for 2020; $94,646 to $1,211,471 for 2021
• Innkeeper’s tax: $91,960 to $262,742 for 2020; $13,137 to 227,710 for 2021
• Gaming tax: $235,219 to $655,763 for 2020; $21,384 to $570,229 for 2021
• Vehicle excise tax: $319,083 to $918,960 for 2020; $63,817 to 816,854 for 2021
Researchers concluded that governments that rely on property taxes more so than the taxes listed in the study will fare better.
“Having a heavy manufacturing base is good for you,” Quyle said. “The fact that you have manufacturing, that you have factories and you have significant personal property in addition to real property helps to insulate you to some degree.”
But all counties will experience revenue loss. “It’s not a good situation for anybody,“ Quyle said. “You’re going to have to tighten belts.”
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