A decline in income tax collections this year powers the concerns of city administrators, but a city leader says he expects a rebound in the city’s main revenue source soon.
Mayor Rodney Metz said he intends to request a report today from the city’s Tax Information Office regarding a breakdown of income tax collections.
“We are worried about income tax collections this year because it is down approximately $17,000,” Metz told the Wapakoneta Daily News. “I really want to know where we are up and where we are down. I am trying to get some information together regarding collections — such as are collections up or down in commercial, manufacturing or residential.”
This report should help in determining where the slip in income tax collections are this year. He anticipates giving a report to Wapakoneta City Council members at their meeting scheduled for 7:30 p.m. today.
Through October, year-to-date collections have decreased $17,479.59, from $1.818 million to $1.801 million. Collections for October decreased more than $6,000 to $171,532 from $177,873 in October 2010.
Metz, Safety-Service Director Bill Rains and Wapakoneta City Council members voiced concern earlier this year when the first quarter total at $519,539 trailed income tax collections in 2010 at $531,732.
The year-to-date total rebounded through the first half of the year with $649,805 income tax collected, compared to $633,179 in 2010. The rebound was due to an April collection of $382,844 outpacing the $345,229 income tax collected in April 2010.
Third quarter collections this year remained consistent each month at approximately $153,000, totaling $460,547 for 2011, a nearly $16,000 decrease from $476,120 in the third quarter of 2010. In 2010, the difference came in August where collections spiked to $182,896.
The city of Wapakoneta is not alone in experiencing decreased income tax revenue.
Through the first 10 months of the year, the city of St. Marys has collected $3.153 million, a decrease from $3.255 million it collected in 2010. For the month of October, St. Marys collected $374,039.37 in income taxes — approximately $11,000 more than the $362,461.17 it collected during the same period in 2010.
“It’s tough to predict, you have a ballpark but you don’t know if they will be up or down,” St. Marys Safety-Service Director Tom Hitchcock said.
The city of St. Marys has a 1.5 percent income tax, while the city of Wapakoneta has a 1 percent income tax.
The Wapakoneta mayor said he intends to approach businesses again this year as he has in the past to discuss their plans regarding expansion and hiring. Metz explained the inquiry serves a dual purpose — they can determine what type of help or services provided by the city to help the business expand and if he and city leaders can expect income tax collections to increase the next year due to increased employment rolls.
With the city’s budget process set to begin soon, Metz said employment projections by businesses help in the city’s budget process for the next year.
“At this point in time, unless we see something major in regard to the income tax collections, we are not going to be looking at anything out of the box or any expense that is unusual,” Metz said.
The city’s General Fund expenses for 2011 have been estimated at $6.34 million, with funds in excess of $2.1 million from income tax collections coming from the state and county and through state and federal grants. The city’s Enterprise Funds, which are self-sufficient and include electric, sewer and water, totaled $22.94 million.
The mayor noted he and Rains reviewed grants and the city’s finances with City Auditor Gail Walter and Engineering Department Supervisor Mary Ruck last week.
Councilor-at-large Wilbur Wells, who chairs the Finance Committee, informed councilors and administrators he is worried about the budget being too thin or strapped down because of several grants requiring a match and other city projects planned for 2012 and in the near future. Wells requested the meeting.
Grants typically required the city to pay for the work completed first and then wait for reimbursement from the state, but Metz said that process might change.
“We met to go over the grants we applied for, our contributions and our cash flow and one of the things that was discussed is ODOT (Ohio Department of Transportation) or the state or the feds can pay contractors directly and it does not have to go through our books,” Metz said. “We intend to pursue that so the only thing we have to do is when they sign off on a project and they pay, our contribution or check goes with that at the match rate. We plan to be following that method in the future.”