YOUNGSTOWN — For the second year in a row, the city broke its record for income tax collection in 2023 with the expectation of a 1% growth this year.

The city ended 2023 with $52,481,100 from its 2.75% income tax and business profit tax. That is a 3.15% increase from the $50,879,800 Youngstown collected in 2022. Finance Director Kyle Miasek had predicted a 2.4% increase.

“Since 2022, we have seen wage growth in the city accelerate so it increased our income tax,” he said. “We did better than expected because wage growth was more significant than estimated. But it’s leveling off.”

The increase from 2020 to 2021 was 5.69% and then 8.41% from 2021 to 2022.

The 3.15% increase from 2022 to 2023 was welcome news, Miasek said, but he doesn’t expect the increase to be as large this year. Miasek said he is projecting a 1% increase from 2023 to this year. That’s still almost $525,000, he said.

“I haven’t seen any deterioration in the base, and that’s a very encouraging sign,” Miasek said. “There was concern coming out of the pandemic that the base would be lower. But overall employment remains healthy in the city footprint. We’re not seeing as many new jobs as we’d like, but we are seeing an increase in wages.”

That wage growth is also impacting city workers, most who are receiving 2.5% increases this year as they did last year. City employees received 2% raises in 2022. That came after more than a decade of getting either no raises or 1% increases.

Also, the cost of goods and services has increased in the past couple of years, Miasek said.

Between that and employee salary increases, the growth in income tax revenue kept pace with expenses, he said.

“It costs the city more to do business,” Miasek said. “Revenue went up as did the cost for the city to operate and provide services. But the city is better financially today than when 2020 came to an end. We’re trying to wisely use revenues available in a conservative manner.”

The city received $44,404,600 in income tax revenue in 2020 — the year of the COVID-19 pandemic. In 2019, collections were $47,133,500 so the city had a 5.79% decline in 2020.

Before 2022, the city had never collected more than $50 million in income tax.

The old record was $49,815,000 in 2006.

Mayor Jamael Tito Brown said: “Our continued relationship with our local and regional economic development partners, site readiness program and business retention and attraction have been great contributors to our success. We will continue to invest in business stabilization and growth.”

One post-COVID-19 uncertainty, Miasek said, was a state law that allows people to seek refunds who used to work in municipalities that charge income taxes, such as Youngstown, and now work from home and / or work less often in the city.

Youngstown gets about 85% of its income tax from those working in the city but living outside of it.

The city provided $1,297,500 in refunds last year, up 29.57% from 2022. The 2022 refund amount of $1,001,400 was the lowest for the city in several years while the amount refunded in 2023 was typical of what Youngstown has given back to people since 2018.

Also, the city saw a 1.11% decrease in 2023 in income tax revenue from those such as doctors and lawyers who used to do more work in Youngstown. The decrease in 2022 was 9.18% so the impact wasn’t as severe last year, Miasek said. The amount of income taxes collected from those professionals went from $3,774,600 in 2022 to $3,732,800 last year.

“People learn how much they’re making and where they’re making it and make adjusted payments,” Miasek said. “It’s a small amount of money, but it declined because people have done a better job of learning days in and out of the city.”