Marysville officials are saying that through the first five months of 2021, finances look good, but warned it is too early to predict how the year will end.
At Monday’s City Finance Committee meeting, Marysville Finance Director Brad Lutz said that through May 31, the city had received $10.44 million in income tax receipts, an increase of $2.28 million, or nearly 28% above the same period in 2020.
“There is no other way to put this, it’s huge,” Lutz said, but added that the number comes with “a pretty significant caveat.”
Lutz explained that in 2020, the deadline for filing and paying local income tax was pushed from the traditional date of April 14 to July 15, 2020.
On March 24, the Ohio Department of Taxation announced an extension of the state income tax filing deadline had been extended from April 15, 2021 to May 17, 2021, to mirror the federal deadline.
“The reality is, we are not comparing apples to apples,” Lutz said, explaining that he will not be comfortable comparing year-to-date numbers until after August.
He did say he is guessing that not all of the increased revenue is due to the filing schedule, but, “some amount of that money is due to that.”
Lutz said that while he does not want to “throw a wet blanket” onto the numbers, “I just don’t want anyone to see 27.9% and think this is going to be the percentage at the end of the year.”
Lutz said that in looking at the city’s top businesses, one business is going “really well.”
He said the state does not name the businesses, but employees from the top tax withholding business in the city has paid nearly $1.6 million in income taxes through May 31, an increase of more than $207,000 more than the same period last year.
“We don’t know how long that is sustainable,” Lutz told the committee.
He said it is too early to know if the upswing is “the new normal” or an anomaly that will settle once the market has adjusted. He said that if the increase is not sustained, the revenue should be treated like one-time revenue and used for one-time expenses rather than for operational expenses.
The finance director said city officials should be “prudent on our part to be careful with what we are seeing.”
Of the city’s top 10 businesses, just two are seeing lower revenue. Through the end of May, the top 10 businesses have paid $3.51 million in income tax for the employees, an increase of more than $343,000 or nearly 11% over the same period in 2020.
“Luckily for us, we are a diverse economy here in the city, compared to other cities our size, where one industry doesn’t throw us completely out of whack,” Lutz said.
In his report, Lutz also noted that property tax revenue was more than $100,000 above the same time a year ago.
Council member Alan Seymour, who serves on the finance committee, agreed with Lutz, saying the city should, “proceed with caution for anything that hasn’t met the established norm.”
Lutz also said the city bed tax revenue is above estimates. He said it is only a small portion of the city revenue, but is “an overall indication of the economy.”
Income from investments also represents only a small portion of the budget, but Lutz did say the city is earning very little return on investments. He said that through May 31, 2020, the city earned more than $114,000 on investments and less than $32,000 in the same time this year. Lutz called the number “ridiculously low.”
“There just isn’t anything we can do,” Lutz said, noting that state regulations limit the way public entities can invest.
Through the end of May, city revenue has outpaced city spending by nearly $1 million.