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V&M expansion boosts tax revenue for Girard
By Danny restivo
girard
City officials said they have received an increase in tax revenue from the expansion of V&M Star, but they expect the cash flow to drop a bit when the plant begins operation.
Auditor Sam Zirafi said the city has collected $1,061,000 in income tax revenue from construction workers at V&M since Aug. 2010. He said the city anticipates it will receive between $1.5 million to $2 million by the time the expansion process is finished.
When V&M begins operation in the new facility, which is scheduled for October, the city will lose the income-tax revenue from the construction, but it will gain back some of the money from V&M employees, he said.
Zirafi believes the income tax revenue from V&M employees will be less than the tax revenue from construction workers. He said the amount of money the city will collect during production will be comparable to what the city received from Indalex Inc., which closed in 2007.
“The only measurable benefit is the increase of income tax from construction workers,” said Zirafi.
Indalex employed approximately 300 people, and was the largest employer in Girard at the time, said Mayor James Melfi.
“We lost about $300,000 per year in tax revenue after Indalex left,” he said. Melfi and Zirafi believe the V&M expansion will fill a void created by the closure of Indalex, but it won’t equal the amount of tax revenue garnered from the construction workers.
The new $650 million facility officially broke ground in June 2009, after Youngstown and Girard agreed to split the tax revenue.
The two cities were part of a Joint Economic Development zone that helped bring the expansion project to the area.
During the construction process, the two entities agreed that Girard would receive 55 percent of the income tax revenue, while Youngstown would take 45 percent of the first $3 million in tax revenue. They would split evenly any tax revenue above $3 million.