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City official warns against comparisons after one strong month of income tax collections

City official warns against comparisons after one strong month of income tax collections

YOUNGSTOWN — The city’s latest monthly income tax collection is its best since mid-2019, but its top financial official said not to put too much faith in an economic rebound on a single month.

“It’s great to look at one month, but we need to look at the big picture,” said Kyle Miasek, interim finance director. “One month doesn’t mean anything. If I get two more months of that, then we’re looking at a rebound.”

The city’s income tax collection for December was $4,270,900. The payments for that month were made in February as businesses have until the end of January to remit the taxes to the Regional Income Tax Agency, which then gives them to the city a few weeks later.

It was the largest amount of income tax collected by Youngstown since $4,285,600 in May 2019.

The increase could be attributed to those working in the city getting year-end bonuses, Miasek said.

“At year end, there’s always bonuses paid,” he said. “These are always strong months. It’s timing.”

2.75 PERCENT TAX

The city in November received $3,580,700 in collections from its 2.75 percent income tax, Miasek said.

The city collected $7,851,600 combined during the first two months of 2021 — for amounts owed for November and December 2020. Miasek said he projected the city would collect $7,855,100 during those two months so what was actually received is only $3,500 less.

“It’s good to be close to the forecast, but the forecast is a year over year loss” compared to what was collected in 2020, Miasek said. “We’re trending well against the forecast. I’m hoping the target forecast is correct. I don’t want to go lower than the forecast.”

The city is projecting a $43,601,000 income tax collection for 2021. That’s a 1.8 percent decline from the $44,404,600 collected in 2020.

The city received $47,133,500 in income tax in 2019 so the 2021 projection is $3,532,500 less than what was collected two years ago.

“Can we achieve the $43.6 million?” Miasek said. “If we do better, that’s good. If not, it’s more painful. The issue is if we meet that goal, it’s still $3.5 million less than 2019.”

PANDEMIC EFFECT

The city collected $7.98 million during the first two months of 2020, before the COVID-19 pandemic occurred, Miasek said.

The city is down $128,400 — 1.6 percent — from 2020 through the first two months.

Miasek said he’s projecting $3,779,000 in income tax collections for next month and $3,851,000 for the following month. It received $3,912,600 and $3,920,400 in 2020 in those respective months, he said.

The 2021 projection would be a $203,000 reduction for those two months compared to 2020.

Despite expectations to collect less income tax this year and the reduction last year, largely caused by the pandemic, the general fund grew from an $855,000 surplus at the beginning of 2020 to $6,907,322 at the start of this year.

That was largely because the city received $5.3 million in federal COVID-19 relief funds, $2.8 million in state workers’ compensation rebates, $400,000 from voluntary employee furloughs and another $400,000 in reductions in spending.

The general fund is projected to end this year with a $4,607,322 surplus — a $2.3 million loss since Jan. 1.

SMALL SURPLUSES

Also, funds subsidized by the general fund — police, fire, street, park, emergency 911 center, health and road improvements — are projected to lose $2,212,570 combined and end 2021 with very small surpluses.

The federal COVID-19 relief payments and other financial boosts will help the city maintain a surplus of less than $500,000 in the general fund and the funds it supports by the end of 2022, Miasek said, if there isn’t an economic recovery. He’s expecting a deficit unless drastic changes occur.

Mayor Jamael Tito Brown said the city’s challenge is “providing the level of services we’ve been giving to the citizens of Youngstown” without devastating the city’s finances.

“We want to be conservative, but I don’t want to be so conservative we cut off services,” he said.

City council has to approve the 2021 budget by March 31.

Councilman Mike Ray, D-4th Ward, also said he is “leaning on the conservative side” with regard to the budget.

dskolnick@tribtoday.com

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