Income-tax revenues up in Hamilton, Middletown

Hamilton revenues see healthy gain; Middletown’s results up, but mixed.

The city of Hamilton’s income-tax revenues were up 8.45 percent last year over 2014, and if this year’s the first-quarter revenues are an indication, they could make a similar jump this year.

Through the first quarter of this year, total income-tax revenues were up 7.8 percent, or $466,587, over the same period of 2015.

The revenue growth indicates economic factors are improving in the city — non-residents who work in Hamilton are making more money, as are self-employed residents or residents who work outside the city and pay income taxes to Hamilton. Businesses this year also have sent in in more net-profit taxes.

“One of the things that’s very exciting for me is seeing the income taxes,” city Finance Director Tom Vanderhorst recently told members of city council. “That’s strong, and I would be excited about that.”

It’s especially good news for the city because the finance department created this year’s budget based on the assumption that income taxes that pour into the city’s general fund would be down 1.12 percent from last year, Vanderhorst said. He now believes the general fund, which receives about 90 percent of all income-tax revenues, will reap $2 million more in income taxes than predicted, if current trends hold.

Hamilton in its budgeting makes a point of conservatively predicting income and aggressively predicting bad-case scenarios for expenses, Vanderhorst said.

“I think when you do that, it builds stability for the budget,” he said.

Meanwhile, in Middletown, total income-tax revenues during the first quarter of this year were up 2.9 percent over the same period of 2015. Middletown’s income-tax revenues for the full year of 2015 were 4.9 percent above 2014.

Unlike Hamilton’s results, which were positive across the board, Middletown’s were mixed: Withholdings by businesses from their employees’ pay were up 6.8 percent; but net-profit taxes sent by businesses were down 7.6 percent; and income taxes sent by Middletown residents (who either live in the city and work elsewhere, or who are self-employed) were down 13.6 percent.

Part of the reason for the Middletown residents’ amounts being lower may be that the city did less delinquent-collection work in late 2o15 and early 2016 than the corresponding periods a year earlier, Middletown Finance Director Jacob Burton said.

Hamilton Council Member Timothy Naab noted his city's numbers could improve further through the year, "because as we learned, (high-tech shock-absorber manufacturer) Thyssenkrupp Bilstein added staff that they had not projected, and as StarTek and as Barclays ramp up…" revenues should continue to climb. Barclays' new Barclaycard operation has committed to creating 1,500 jobs in Hamilton by 2018.

While revenues have been rising, Vanderhorst and other Hamilton officials have expressed concern about law changes by Gov. John Kasich and the Ohio General Assembly that have significantly sliced revenues cities receive from the state government, with further cuts to come next year under already-signed laws.


Here’s a breakdown of Hamilton’s income-tax revenues:

  • Individual income taxes, which come from Hamilton residents who work elsewhere or are self-employed, were $1.08 million, up 9.1 percent. That means "one of two things is happening: We're either getting more citizens, or the citizens who are here are making more," Vanderhorst said.
  • Income taxes sent by businesses ($513,784) were up 37.8 percent, which could reflect the number of businesses making larger first-quarter estimate payments this year. Businesses often do that as a tax-planning tool when they predict higher net profits than in earlier years.
  • Withholdings sent to the city by companies from their employees' payroll ($5.o2 million) were up 5.6 percent. Withholdings in Hamilton account for about 78 percent of all income-tax revenues.
  • Hamilton's overall income-tax revenues — minus what was paid out in refunds — were $6.45 million, up by 7.8 percent, or $466,587, from last year.


Here are corresponding income-tax numbers for Middletown:

  • The $750,123 in individual residents' income taxes, collected from Middletown residents who work elsewhere or are self-employed, were down 13.6 percent in the first quarter from the same period of 2015. A year earlier, the first quarter had been up 9.6 percent over 2014. "I would suspect residential collections are down due to less delinquent collection work occurring during 4th quarter 2015 and 1st quarter 2016 as compared to the same time period in the previous year," Burton said. "This was simply due to staffing changes within the Tax Department that occurred in late 2015 and at the beginning of 2016."
  • Income taxes sent by Middletown businesses for net profits ($265,683) were down 7.6 percent from the first quarter of 2015, which had revenues that were 7.5 percent below that period of 2014. "There were no changes in collection periods that would account for any type of increase or decrease," from last year to this year, Burton said. "I have no specifics at this time as to why business or residential is down."
  • Withholdings sent to Middletown by companies from their employees' payroll (almost $4.8 million) were up 6.8 percent over 2015, which in turn was 9.6 percent above 2014. Fortunately for city revenues, the withholding category of revenues accounts for about 82 percent of total income-tax revenues.
  • Middletown's overall first-quarter income-tax revenues (nearly $5.8 million) were up 2.9 percent ($166,039) over last year.

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