Treasurer predicts $20M in collections

The biggest growth was in the corporate tax revenue.
WARREN -- City income tax collections are expected to approach $20 million this year and exceed last year's collections by just over 5 percent, according to city Treasurer John Taylor.
To be more exact, the projection is $19,793,821, which is 5.15 percent above last year's figure, Taylor reported to city council Tuesday.
Taylor, who leaves office Dec. 31, told Council $15,195,239 of the total is projected to be from withholdings from employees' wages; $2,253,198 from the corporate tax; and $2,345,384 from self-employed individuals.
Warren levies a 2 percent tax on wages, salaries, commissions, fees, bonuses, tips, lottery winnings, net rental income and corporate net profits.
The biggest percentage of projected growth compared to last year was 56.73 percent from the corporate tax, which Taylor said was attributable to locally-based companies, including steel-related businesses, that have customers elsewhere in the nation, where the economy is performing well.
But Taylor warned that corporate tax collections can fluctuate widely from year to year.
Collections from self-employed individuals were projected to be up 14.41 percent from last year.
But Taylor said he was troubled by the employee withholding segment's having apparently declined 0.92 percent from last year. This is the third consecutive year of decline for that segment, he lamented.
Taylor told council the tax office has been aggressive under his tenure in finding those who should be paying city income tax, through cross matches with state income tax and city water department records and other sources, and in collections through municipal court action.
Possible dark cloud
The bankruptcies of WCI Steel and Delphi Corp. and uncertainty over General Motors' financial health cloud the future of city income tax collections, Taylor said. Early retirements that result from corporate downsizing reduce the pool of taxpayers and collections because the city doesn't tax retirement income, he noted.
"You're just going to have fewer people paying income tax in the city of Warren, and this year, you got pulled out of the fire by the corporate income tax receipts," Taylor said.
Rising fuel prices and higher profits for oil companies that own gas stations in the city will boost city income tax collections from that sector next year, Thomas Gaffney, tax administrator, said.