Signs of pandemic? More drinking, smoking and home improvement

Randy Ludlow
ThisWeek group
State liquor sales in Ohio have increased during the COVID-19 pandemic.

As the COVID-19 coronavirus pandemic continues, Ohioans are lighting up – and getting lit up – more often.

Both cigarette and liquor sales are up markedly in Ohio in the seven months since the pandemic began disrupting how people live and cope.

Compared to before the pandemic, monthly state liquor sales have increased an average 23% to 1.4 million-plus gallons – the equivalent of 3.6 million fifth bottles or 61 million shots of the hard stuff.

Day drinking and liquor profits, though, don't help Ohio's bottom monthly line. The state's privatized economic-development nonprofit, JobsOhio, leases the state's $1 billion-plus annual liquor enterprise.

The stress of the pandemic also is getting to smokers – and perhaps creating new ones.

Reflecting higher sales and more puffs, Ohio's cigarette excise-tax collections are running $23.5 million or 13.6% above projections for the first quarter of the state fiscal year that began July 1.

"The substantial overage is likely related to heightened consumption during the continuing pandemic ... and how the personal and economic impacts are felt by the public," state budget officials wrote.

Another sign of the pandemic: Ohioans are spending less on recreation, hotels, food service and gas stations and more on fixing up their homes as they hunker down, helping sales taxes run $106.5 million or 4.5% above fiscal year-to-date estimates.

"To the extent that Ohioans are spending more of their time at home, spending is shifting toward items used at home," with more purchases from furniture, building-materials, home-improvement and general-merchandise stores, state budget officials said.

Given an 8.4% unemployment rate with 472,000 Ohioans still out of work in September, pent-up consumer demand and federal Coronavirus Aid, Relief, and Economic Security (CARES) Act payments of $1,200 a head for adults are credited with keeping state sales-tax receipts high.

For the first quarter of the fiscal year, the state has collected $262.4 million or 4.1% more in taxes than originally forecast, allowing Gov. Mike DeWine to remain patient in moving on budget cuts and tapping the $2.7 billion rainy-day fund. The budget shortfall for this fiscal year had been pegged at around $2 billion.

But there are signs that economic activity – and thus, tax collections – might be slowing down given increasing claims for unemployment benefits, which ticked up in Ohio in the latest reported week.

The state's two biggest revenue sources – personal income taxes and non-auto-sales taxes – missed estimates for the first time this fiscal year in September, said Kimberly Murnieks, director of the Ohio Office of Budget and Management.

"Ohioans' great efforts to keep COVID under control" have played a part in tax collections remaining relatively on target, she said.

Coronavirus cases spiking to record highs in Ohio in recent days are worrisome, she said, echoing DeWine.

"Ohio was in a strong position at the onset of the pandemic, and our recovery depends on keeping the virus in check," Murnieks said.

rludlow@dispatch.com

@RandyLudlow