Total tax receipts were up 5.66 percent in 2016 over the prior year for Hamilton, with gains in all three categories — withholdings that companies sent the city from their employees’ payroll; taxes the companies sent in from their net profits; and amounts sent in by city residents who work from their homes or outside city limits.
In Middletown, total tax revenues were 3.3 percent higher last year than in 2015, with gains in employees’ withholdings and businesses’ net-profit taxes, but with a 13 percent drop in taxes received from residents working from their homes or outside the city.
“2016 was our highest income-tax revenue in 20-plus years,” said Middletown Finance Director Jacob Burton.
The increases are good news for both cities, because they built upon even more significant jumps in tax revenues from 2014 to 2015: Hamilton’s tax revenues had increased 8.45 percent in 2015, while Middletown’s tax gained 4.9 percent from 2014 to 2015.
“I just feel like we’re in a good place to stabilize the budget,” said Hamilton Finance Director Tom Vanderhorst. “I think we’re in a good place, but I still don’t feel like we’ve really in-filled what the governor has cut in his budget (with reductions to the local government fund and elimination of estate taxes).”
On the other hand, his city is seeing year-over-year revenue growth, and part of what the city lost from state revenues were made up for by layoffs, he said.
“I think the overall economy is improving, but you have to hand it to (city Economic Development Director) Jody Gunderson and his team,” he said. They have attracted significant employment from such firms as StarTek, Barclaycard and growth at shock-absorber maker ThyssenKrupp Bilstein.
“I feel good because that’s sustainable,” Vanderhorst said of Hamilton’s tax growth. Meanwhile, the city has the proposed Spooky Nook Sports at Champion Mill mega indoor sports and fitness complex on the horizon, as well as market-rate and upscale housing complexes planned, including the planned Marcum Apartments downtown.
During 2016, the city had about $1.5 million in unbudgeted revenues that it used to pay in cash for repairs, lighting upgrades and other safety improvements in the city’s George McDulin Memorial Parking Garage at 102 N. Second St., which serves StarTek and other downtown companies. This year the city is using some of the growing revenues to employ more safety workers, including eight additional police officers.
While city revenues are growing, Hamilton has been facing problems being able to repair its streets, and may seek a road-repair levy in 2018.
Hamilton, which tries to budget tax revenues conservatively, has projected overall tax revenues will grow 1.5 percent this year over 2016.
Meanwhile, Burton in Middletown credited his city’s 3.3 percent tax gain to “one-time construction revenues from our large projects with NTE (the power plant now under construction), the AK Steel Research and Innovation Center, the new public schools and other projects,” as well as new jobs added to the city in 2016. He believes “at least 8 percent of the increase in withholding was related to construction at NTE.”
The city is projecting total income taxes of $22.096 million, Burton said. That’s $188,809 less than the actual 2016 revenues. “As always, we try to budget revenues conservatively,” he said.
Although Middletown’s tax revenues grew in 2016, Adkins warned council in recent weeks that because of higher-than-expected costs faced by the city’s self-insured health-care program, Middletown may have to lay off employees, and has frozen hirings of most positions until at least June. Middletown also is looking at a tax increase as a way to repair its streets.
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2015 and 2016 tax revenues for Hamilton and Middletown:
HAMILTON: Income taxes from residents who work from their homes or work elsewhere and pay city income taxes were 4.227 million, up 6.1 percent. That increase reflects either that residents were making more money, more city residents were working, or more people were living in the city and working — or, some combination of the three.
MIDDLETOWN: Income taxes from residents were $2.569 million, down 13 percent from $2.954 the year earlier, meaning there was a drop in income, number of residents working, or the number of residents. Possibly, it was a combination of the three.
HAMILTON: Withholdings sent to the city by companies from their employees’ payroll grew 4.5 percent, to $19.563 million.
MIDDLETOWN: Companies’ payments of employees’ withholdings grew 5.7 percent, to $17.652 million.
HAMILTON: City companies’ net-profit taxes grew 14.4 percent to $2.586 million in 2016.
MIDDLETOWN: City companies’ net-profit taxes grew 7.6 percent to $2.06 million in 2016.