Posted: 10:45 a.m.Monday, May 9, 2016

Income-tax revenues up in Hamilton,Middletown

Hamiltonrevenues see healthy gain; Middletown’sresults up, but mixed.

ByMike Rutledge

Staff Writer

BUTLER COUNTY — 

Thecity of Hamilton’sincome-tax revenues were up 8.45 percent last year over 2014, and if thisyear’s the first-quarter revenues are an indication, they could make a similarjump this year.

Throughthe first quarter of this year, total income-tax revenues were up 7.8 percent,or $466,587, over the same period of 2015.

Therevenue growth indicates economic factors are improving in the city —non-residents who work in Hamilton are makingmore money, as are self-employed residents or residents who work outside thecity and pay income taxes to Hamilton.Businesses this year also have sent in in more net-profit taxes.

“Oneof the things that’s very exciting for me is seeing the income taxes,” cityFinance Director Tom Vanderhorst recently told members of city council. “That’sstrong, and I would be excited about that.”

It’sespecially good news for the city because the finance department created thisyear’s budget based on the assumption that income taxes that pour into thecity’s general fund would be down 1.12 percent from last year, Vanderhorstsaid. He now believes the general fund, which receives about 90 percent of allincome-tax revenues, will reap $2 million more in income taxes than predicted,if current trends hold.

Hamilton in its budgetingmakes a point of conservatively predicting income and aggressively predictingbad-case scenarios for expenses, Vanderhorst said.

“Ithink when you do that, it builds stability for the budget,” he said.

Meanwhile,in Middletown,total income-tax revenues during the first quarter of this year were up 2.9percent over the same period of 2015. Middletown’sincome-tax revenues for the full year of 2015 were 4.9 percent above 2014.

UnlikeHamilton’s results, which were positive across the board, Middletown’s weremixed: Withholdings by businesses from their employees’ pay were up 6.8percent; but net-profit taxes sent by businesses were down 7.6 percent; andincome taxes sent by Middletown residents (who either live in the city and workelsewhere, or who are self-employed) were down 13.6 percent.

Partof the reason for the Middletown residents’ amounts being lower may be that thecity did less delinquent-collection work in late 2o15 and early 2016 than thecorresponding periods a year earlier, Middletown Finance Director Jacob Burtonsaid.

HamiltonCouncil Member Timothy Naab noted his city’s numbers could improve furtherthrough the year, “because as we learned, (high-tech shock-absorbermanufacturer) Thyssenkrupp Bilstein added staff that they had notprojected, and as StarTek and as Barclays ramp up…” revenues shouldcontinue to climb. Barclays’ new Barclaycardoperation has committed to creating 1,500 jobs in Hamilton by 2018.

Whilerevenues have been rising, Vanderhorst and other Hamilton officials haveexpressed concern about law changes by Gov. John Kasichand the Ohio General Assembly that have significantly sliced revenues citiesreceive from the stategovernment, with further cuts to come next year under already-signed laws.

HAMILTON’S NUMBERS

Here’sa breakdown of Hamilton’sincome-tax revenues:

·                      Individual income taxes, which come from Hamilton residents who work elsewhere or areself-employed, were $1.08 million, up 9.1 percent. That means “one of twothings is happening: We’re either getting more citizens, or the citizens whoare here are making more,” Vanderhorst said.

·                      Income taxes sent by businesses ($513,784) were up 37.8 percent,which could reflect the number of businesses making larger first-quarterestimate payments this year. Businesses often do that as a tax-planning toolwhen they predict higher net profits than in earlier years.

·                      Withholdings sent to the city by companies from their employees’payroll ($5.o2 million) were up 5.6 percent. Withholdings in Hamilton account for about 78 percent of allincome-tax revenues.

·                      Hamilton’s overall income-tax revenues — minus what was paid outin refunds — were $6.45 million, up by 7.8 percent, or $466,587, from lastyear.

MIDDLETOWN’S FIGURES

Hereare corresponding income-tax numbers for Middletown:

·                      The $750,123 in individual residents’ income taxes, collectedfrom Middletownresidents who work elsewhere or are self-employed, were down 13.6 percent inthe first quarter from the same period of 2015. A year earlier, the firstquarter had been up 9.6 percent over 2014. “I would suspect residentialcollections are down due to less delinquent collection work occurring during4th quarter 2015 and 1st quarter 2016 as compared to the same time period inthe previous year,” Burtonsaid. “This was simply due to staffing changes within the Tax Department thatoccurred in late 2015 and at the beginning of 2016.”

·                      Income taxes sent by Middletownbusinesses for net profits ($265,683) were down 7.6 percent from the firstquarter of 2015, which had revenues that were 7.5 percent below that period of2014. “There were no changes in collection periods that would account for anytype of increase or decrease,” from last year to this year, Burton said. “I have no specifics at thistime as to why business or residential is down.”

·                      Withholdings sent to Middletownby companies from their employees’ payroll (almost $4.8 million) were up 6.8percent over 2015, which in turn was 9.6 percent above 2014. Fortunately forcity revenues, the withholding category of revenues accounts for about 82percent of total income-tax revenues.

·                      Middletown’s overallfirst-quarter income-tax revenues (nearly $5.8 million) were up 2.9 percent($166,039) over last year.