The Star Beacon; Ashtabula, Ohio

Local News

January 16, 2013

Higher-than-expected tax collections could indicate Conneaut on the rebound

CONNEAUT — A surprising jump  in municipal income tax revenue is not only helping to keep the city of Conneaut afloat, but could be a sign the city has a brighter financial future.

Finance Director John Williams this week announced gains in the tax will help offset losses in state funding, putting the city at a break-even situation. The city collected nearly $3.1 million in income taxes last year, compared to $2.7 million in 2011. The numbers easily beat Williams’ estimate of another $2.7 million collection year for 2012.

“We’ve done much better than expected,” Williams told City Council at Monday night’s regular meeting.

Other tax-related numbers may indicate a positive swing for local employers. Income taxes paid by businesses jumped 112 percent last year compared to 2011, Williams said. Individual tax collections climbed nearly 7.7 percent, while withholding taxes inched up almost 3 percent over the same period.

“It’s a good economic trend,” Williams said.

One possible reason for the gains is the nation’s rebounding auto industry. Some of Conneaut’s largest manufacturers create products used by auto-makers and reportedly have added shifts and ramped up production, according to reports.

The city has also benefited from revenue provided by Lake Erie Correctional Institution, which became private property at the start of 2012, Williams said. When income tax, property tax and other sources are tabulated, the prison generated $857,000 for the city last year, he said.

Extra revenue has helped lessen somewhat the loss of state revenue, particularly cuts in local government funding ($300,000 reduction) and inheritance tax ($125,000 eliminated) that go into full effect this year.

“We’re feeling the full brunt in 2013,” Williams said.

The city is also operating with fewer employees and have scaled back expenditures in recent years, which has also helped the municipal bottom line, council was told.

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