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youngstown Revenue from income tax increases
YOUNGSTOWN
The city will reverse a four-year trend and finish 2011 with an increase in income-tax revenue compared to the previous year, its finance director says.
Youngstown is expected to end this year with $41,850,000 in income tax, a 1.8 percent increase from 2010, Finance Director David Bozanich said.
The city collected $41,125,000 in 2010.
“We’ve had four years of declines, so the good news is, we are able to have an increase this year,” Bozanich said. “The local economy is coming back after four years of decreased spending. You’re seeing more local confidence in the economy. It’s good to see a recovery and that we’re starting to grow slightly.”
The money comes from a 2.75 percent income tax imposed on those who work or live in the city and a 2.75 percent profit tax paid by companies, he said.
Also, Bozanich said city officials are expecting income-tax revenue to increase in 2012 by 1.5 percent to 2 percent compared with this year.
“We’re seeing more positives with V&M Star and other companies making investments,” he said. “We’re feeling a little more optimistic with a strong dose of caution.”
V&M Star started building a $650 million expansion in June 2010. As of last month, Youngstown’s share of the income-tax collection on work being done at V&M since it started is $338,918.
Youngstown splits the money with Girard as part of a deal the two cities signed to share income-tax revenue from this project. The V&M mill will open in mid-2012 and be fully operational by 2013.
The city’s income-tax collection declined annually from $48,693,449 in 2006 to $41,125,000 last year. The largest year-to-year decline was from 2008 with $47,867,000 to 2009 with $41,888,700, a 12.5-percent drop.
Even a 2-percent increase in 2012 would leave Youngstown with $6 million less than it collected in 2006.
Income tax is about 65 percent of the city’s revenue, Bozanich said. The rest comes from numerous categories including court fines and fees, building permit costs, franchise fees, Local Government Fund money, and rent at city-owned facilities.
The city will likely end this year with a surplus of up to $500,000 in its general fund, Bozanich said.
The finance department has asked city departments for 2012 budget proposals by mid-January.
Budget hearings with city council could start around that time.
City council must adopt an annual budget by March 31 of the year.