ECONOMIC INDICATORS
Trend in the Cuyahoga County Sales Tax Collection Level
1990-2008
By George Zeller
Economic Research Analyst
October 2008
Summary
The newly available October 2008 figure on sales taxes collected in Cuyahoga County finds that this
level declined by 4.2% in comparison to the same level in October 2007. The tax collection level has
now been negative during nine of the ten months of 2008. The October decline was the fastest decline of
any 2008 month, and was the fastest decline since November 2006. Therefore, there is still no clear
evidence that a trough has been reached in the Cuyahoga County economy from the lengthy 2000s
recession. To the contrary, the decline in Cuyahoga County retail sales accelerated once again in
October.
Definitions
The Cuyahoga County sales tax collection level is measured in this report by using a constant 1%
collection in all months between 1990 and the present. Changes in the rate at which the tax is collected
do not impact the trend in the data under this approach. Since the monthly sales tax figure is notoriously
volatile during individual months, an unusually long 12 month moving average minimizes that volatility
so that the underlying economic trend is clearer. Data are adjusted for inflation by the Consumer Price
Index, and are expressed in current dollars. In this updated report, July 2008 dollars represent the
inflation adjustment. Percentage changes from year to year are generated by a comparison to the current
real 12 month moving average with the real 12 month moving average during the same month of the
prior year.
The sales tax is an important revenue stream for governments in all 88 Ohio counties and for the state of
Ohio itself. It also is a major local funding source for most public transit authorities in Ohio. So, the
level of sales taxes collected is an important figure for the financing of these government entities, and
therefore the level of taxes collected is vital during budget preparation and management. In addition, the
level of