Youngstown income tax revenue rebounds
YOUNGSTOWN — For the second straight month, the city’s income tax collections exceeded the projected amounts, but they’re slightly below the estimate through the first five months of the year.
“The last two months have been positive,” said Kyle Miasek, city finance director. “It shows that we have stabilized. But we haven’t gained back what we lost pre-pandemic.”
The payment for March was $4,232,800, well above the estimate of $3,851,000.
The March payment is made in April as businesses have until the end of that month to remit the taxes to the Regional Income Tax Agency, which then gives them to the city a few weeks later.
The February payment was $4,156,500, which was more than the $3,851,000 estimate.
Those are major rebounds from the first three months of collections, particularly the January payment, which was $701,000 under the projection and the worst month for collections from the city’s 2.75 percent income tax in more than two years.
With two solid collections since, the city has collected $19,318,900 during the five first months of the year. The projection was for $19,435,000 in collections.
The city is $116,100 under the projection, 0.6 of a percent.
“If next month is like this, I’ll be on target after six months,” Miasek said. “It’s possible we bottomed, out and we’ll hopefully see job growth in the remaining six months of the year. It’s good news. We’re not out of the woods, but hopefully it’s looking up.”
For 2021, Miasek projected an overall decline of 1.81 percent in income tax collections compared with 2020. So far this year, the decline is 1.55 percent compared with last year, he said.
The city had projected a $43,601,000 income tax collection for 2021. It was $44,404,600 in 2020 and $47,133,500 in 2019.
“We are experiencing problems with a second year-over-year decline,” Miasek said.
But with Youngstown receiving $82,775,370 from the most-recent federal COVID-19 relief package, the city will be allowed to use portions of those funds to make up the shortfalls for 2020 and 2021 compared with 2019, Miasek said.
Also, if the declines continue in 2022 and 2023, the city can use the federal money in those years to make up the differences as well, he said.
The money likely would be used for capital equipment purchases, Miasek said.
Even with the reduced income tax collections, the city’s 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 from Jan. 1.
Also, funds subsidized by the general fund — police, fire, street, parks, emergency 911 center, health and road improvements — are projected to lose $2,212,570 combined and end 2021 with small surpluses.