City looks for new revenue
Reduction of income tax credit benefit could be on horizon
City looks for new revenue Reduction of income tax credit benefit could be on horizon Check out this story on coshoctontribune.com: http://ohne.ws/1w25ACp
Leonard Hayhurst, Community Content Coordinator Published 9:08 p.m. ET Oct. 12, 2014
Coshocton City Council in talks to decrease income tax credit to resident who work outside the city
Currently, residents received full credit if they work outside city on its 1.5 percent income tax
The amount the city is missing out on due to the credit has been more than $200,000 the past three years
The city is in need of new revenue with a loss the past several years of state sources
COSHOCTON – Desperate for new revenue, Coshocton City Council is considering lowering the income tax credit to people who live within the city but work outside it.
An approximate loss of $600,000 to the annual general fund budget over the last five years because of a decrease in local government funds and elimination of the estate tax on the state level has made 2014 the tightest financially yet for the city.
Even with cutbacks on supplies and personnel, costs continue to go up and carryover funds have been depleted from previous years.
City Auditor Sherry Kirkpatrick is scrambling to find money to pay the contract with the Coshocton County Sheriff's Office for police services for the remainder of the year.
The council is expected to approve, at Tuesday's regular meeting, transfers from several general fund accounts of $120,680 to cover November's monthly fee of $119,836 with a bit left over.
Kirkpatrick is already looking ahead to where she can pull money in November to pay December's obligation. What lies after that is hard to say, as representatives from the city and sheriff's office are in talks for a 2015 agreement as the current one expires Dec. 31.
For the past several years, the council, at Kirkpatrick's recommendation, has approved appropriating only so much of the annual contract at one time and then setting more money aside as it becomes available throughout the year.
That has worked well, but Kirkpatrick admits this has been the toughest year yet to make that funding model work. The sheriff's office contract is always the largest general fund expense, with the current deal at $1.4 million.
Income tax is one of the city's largest revenue sources, and that is up 3.8 percent for the year to date over 2013. However, it's a far cry from what was pulled in 10 years ago when major companies such as General Electric, Pretty Products and Ansell Edmont were still operational.
Mayor Steve Mercer said the loss of industry has led more and more residents to seek work elsewhere and the full income tax credit given those individuals has become a significant amount of money. That figure in the past 10 years has been as little as $3,800 in 2006 to as high as $236,000 in 2012. The total for 2013 was $227,858.
Mercer doesn't feel the city should revoke the credit entirely but has asked the city finance committee to review what they think would be fair, with half the credit being a starting point to discuss.
Council members have asked tax administrator Jackie Cushman for numbers on how many residents that would affect and how much the city receives from people who live outside the city but work inside it.
The city has an income tax fee of 1.5 percent. Most other local municipalities are in the 1 to 1.5 percent range. Columbus is the highest of 34 municipalities the city pulled details from at 2.5 percent with Canton, Newcomerstown and Cambridge at 2 percent.
Many give full or partial credit to people who work outside the municipality, but a few such as Danville, New Carlisle and Millersburg give no credit at all.
Mercer said whatever is decided, he would like it voted upon before the end of the year for implementation in 2015. He said they would need to research if any changes could be retroactively applied to the 2014 tax year to be paid in 2015 or if it would go into effect in 2015 for tax payments made in 2016.
llhayhur@coshoctontribune.com
Twitter: @llhayhurst
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