Income tax down: Mayor hoping economic turnaround helps revenues rebound

Wapakoneta city income tax collections fell nearly $10,000 from the previous year, but the amount is still the fifth highest total in the past 10 years.

City administrators say the amount is fine, but they would like to see the number grow as the economy creates jobs and gains more steam.

“It would be nice for the city and her residents if the income tax collections increased, but we will continue to provide the best service to the residents we can with the amount we have collected this past year,” Mayor Rodney Metz told the Wapakoneta Daily News. “I am not necessarily happy with the amount, but there is not much I can do to change the rate.”

Wapakoneta city income tax is 1 percent. Most cities are 1.5 percent. Voters must approve any rate in excess of 1 percent.

Income tax collections totaled $2.109 million in 2011, down from $2.119 million in 2010, but the amount is an increase from $2.065 million in 2009.

“I have instructed the Income Tax Department to check records to make sure everyone has filed and is in compliance with our income tax code,” the mayor said. “We will know more about that in a couple of months in April.”

Metz explained additional income tax money may be collected from individuals but it must be posted in the month it is paid.

He also noted some businesses are using a third-party accounting firm to pay their income taxes, which can delay those amounts being posted to city accounts. This would explain how the year ended and how the quarters rose and fell when comparing the last two years.

Quarterly income tax collection amounts bounced in 2012 compared to amounts collected in 2011. For the first quarter 2011, the city collected $531,732 compared to $519,539 for 2012, the higher collection amounts inverted for the second quarter where 2012 collections outpaced 2011 — $649,805 to $633,179.

The same trend continued for the third and fourth quarters. Income tax collections totaled $476,120 in the third quarter for 2010, while $460,547 for the third quarter in 2011. In the fourth quarter, 2011 totals outpaced 2010 totals by slightly more than $1,000 — $479,891 to $478,574.

The mayor also said Finance Committee members are investigating the effect the school building construction should have had on income tax collections. They expected a spike during 2009 because the school construction  was done in the city and the issue was discussed at a Finance Committee meeting in early January.

“We expected to see all of this revenue from the school during its construction but we didn’t, so we are trying to determine what happened,” Metz said. “We want to know did we see the amount in 2009 and then in 2010 and 2011 we saw increases in hiring elsewhere — we really want to know why we stayed relatively flat in regard to income tax revenue during the construction time period.

“We want to know if those dollars were not generated or was not everything filed and that is something that is being checked and is under review,” he said.

Metz and other city administrators inquired of state officials if they have the ability to cross check to see if those Ohio School Facilities Commission dollars can be tracked and if the income tax revenue was going to Wapakoneta. They are still waiting for a clear answer, but he said they know it will take time.

For 2012, Metz said he is hopeful the income tax revenue will climb.

“At this point, industry worker rolls seems to be pretty stable and a few executives are talking about hiring, but the market is very susceptible to what happens everywhere else,” Metz said. “My hope is to see manufacturing rebound and I also believe the housing market may become a little more stable which should help and that is another positive for the city.”