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Income Tax PowerPoint HHTPP MARCH 26, 2015 Thank you !

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Presentation on theme: "Income Tax PowerPoint HHTPP MARCH 26, 2015 Thank you !"— Presentation transcript:

1 Income Tax PowerPoint HHTPP MARCH 26, 2015 Thank you !

2 Logan Municipal Tax Proposal May 5, 2015 No Income Tax Increase since 1983 Logan has the lowest city income tax rate in the area LGF (Revenue) – decreasing Loss of revenue – Jobs Income Tax Revenue -flat lined Many people are driving out of town to work, paying taxes to the city they work in Logan currently gives a full tax credit to those working outside of the city Expenses (increasing)-Health Care cost, wages and benefits have increased Budgets have been cut – several years of cut City budget balanced from the cash carryover from prior year Income Tax now comprises 76% of General Fund revenue You do not pay City Income Tax on Pension or Retirement Income Only earned income will be taxed The General Fund –funds your local Safety Forces, Administration, Cemetery and Street Department Expenses

3 How Is City Budget Derived?  Supervisors are given budget worksheets. they calculate and turn in expenditure budget request for following year  City Auditor is responsible for calculation of projected revenue  In Oct. the City council’s finance committee meets with the Mayor, Auditor and supervisors to prepare a balanced budget.  Legislation to approve the budget is prepared in Dec and voted on by city council.  During the year, Auditor verifies the budget is followed every variation must have legislation approval.  Every May the state sends an auditor to verify proper accounting procedures and laws are being followed.  This systems of Checks and Balances is to ensure the public money is protected.

4 Logan’s Major Funds General Fund Income Income Tax Intergovernmental Fund (LGF) Property Taxes Services Fines License and Permits Expenses Police Fire Cemetery/Parks City Admin & Legal Street Majority of Expense - Wages and Benefits - 70% of Budget Enterprise funds-receive revenue from sale of goods and services Enterprise Revenue Water and Sewer Billing Expenses Water Plant maintenance Sewer Plant maintenance Water Plant wages Sewer Plant Wages Capital Improvement Money set aside for long term purchases and big investments such as land, buildings, vehicles Revenue comes from % of Income Tax Money and Grants that are administered. Money Cannot be moved between Funds

5 2015 Appropriations General Fund $3,623,523.00

6 General Fund Overview Our Expenditures have exceeded Revenues since 2012

7 Cash Balance as of 12/30

8 Declining Local Government Fund Revenue LGF Established by the State as a way to pump local tax dollars to help communities with falling property taxes. Beginning in 2011 Eliminated Estate Taxes Phase out of Tangible Personal Property Tax Reduction in State Income Tax 2011 2012 2013 2014 665,586573,459437,851458,979

9 Declining Income Tax Revenue Loss of Industrial Base Majority of Residents work outside of Logan Pay Taxes where you work first, then where you live 6 of 10 largest employers declining revenue of nearly $70,000.00 in the past year due to employees retiring and not being replaced Service industry jobs are not replacing the revenue generated from industrial work force HB5 – Negative effect on Municipal Tax revenue Income Tax Rate is at 1.5% since 1983 Residents receive full credit for taxes to another entity

10 Percentage of Income Tax making up Total General Fund Revenue

11 General Fund Income Income Tax and Local Government Funds Declining

12 General Fund Expenditure

13 General Fund Department Wages Fire Levy $165,375.82$156,338.25$146,184.13$187,451.41$167,345.86$148,733.29$172,989.50$200,983.42 Gen Fund fire$265,513.68$290,925.01$321,282.45$308,225.93$313,273.28$324,828.09$321,086.61$315,117.54 total$430,889.50$447,263.26$467,466.58$495,677.34$480,619.14$473,561.38$494,076.11$516,100.96 % Gen Fund38.4%35.0%31.3%37.8%34.8%31.4%35.0%38.9%

14 Health & Life Insurance Health Insurance has increased by 20%

15 City of Logan Funds & Balances 200620072008201020112012201320142015/Budget GENERAL FUND C/FRWD BAL. $371,517.37$686,310.18$1,056,963.79$1,066,817.74$1,075,202.41$1,178,354.12$1,058,864.02$673,032.03$324,618.92 REVENUE $3,026,928.15$3,244,426.30$3,222,873.93$3,635,801.76$3,554,001.25$3,399,610.15$3,242,758.87$3,333,333.06$3,481,655.00 EXPENDITURES $2,712,135.34$2,873,772.69$3,136,175.45$3,627,417.09$3,450,849.54$3,519,100.25$3,628,590.86$3,681,746.17$3,716,127.68 ENDING BAL. $686,310.18$1,056,963.79$1,143,662.27$1,075,202.41$1,178,354.12$1,058,864.02$673,032.03$324,618.92$90,146.24 CAPITAL IMP. FUND C/FRWD BAL. $249,545.78$187,493.69$237,818.63$200,686.47$264,477.37$264,407.78$260,685.91$155,691.04$216,288.79 REVENUE $267,962.05$382,799.50$345,241.11$637,439.54$633,928.76$500,910.96$401,758.90$471,056.67$492,625.00 EXPENDITURES $330,014.14$332,474.56$377,544.10$573,648.64$633,998.35$504,632.83$506,753.77$410,458.92$566,864.23 ENDING BAL. $187,493.69$237,818.63$205,515.64$264,477.37$264,407.78$260,685.91$155,691.04$216,288.79$142,049.56

16 OTHER INCREASING COST DESCRIPTION20092014INCREASE INDIGENT DEFENSE $ 13,343.00 $ 37,890.63 $ 24,547.63 SUPPORT OF PRISONERS $ 75,857.19 $ 124,262.00 $ 48,404.81 FUEL $ 49,088.72 $ 84,162.20 $ 35,073.48 VEHICLE INSURANCE $ 15,062.00 $ 17,250.00 $ 2,188.00 UTILITIES $ 18,880.83 $ 24,594.58 $ 5,713.75 DEDUCTS BY CO/WC PREMIUM $ 22,336.75 $ 38,293.77 $ 15,957.02 ST. LIGHTING $ 54,195.52 $ 62,739.13 $ 8,543.61 SNOW REMOVAL $ 24,060.00 $ 32,011.12 $ 7,951.12 POLICE EMPLR. CONTRIBUTION $ 133,453.57 $ 164,671.92 $ 31,218.35 FIRE EMPLR. CONTRIBUTION $ 112,968.17 $ 122,592.39 $ 9,624.22 $ 189,221.99

17 Moves Administration / Council Have Made Closed Street Garage – Eliminating supervisor position and a mechanic Not replacing retiring positions -4 employees retired in 2014 Street department is down 2 positions – moved benefit line item to Street Highway fund Cemetery down 2 employees Negotiated a wage freeze for two years with OAPSE Union Health Insurance cost decline in 2015 Finance cut department budgets. In 2014 the distribution percentage changed from 50% General Fund 25% Water, 25% Sewer to 34% General, 33% Water, 33% Sewer on non - negotiating city hall employees and administration. Distribution change in Capital Improvement Fund from a 90% - 10% distribution to a 97.5% - 2.5%

18 Actions Similar Communities Have Taken Income Tax Increase Reduce Credit given to residents who work in another City. Tax Levies – for safety forces Renew Fire Levy Reduce Services Reduce Work Force Turn off Street Lights

19 Comparative Local Tax Rates CityTax RateCredit Logan1.51.50 Lancaster1.751.00 Nelsonville1.751.00 Athens1.651.00 Circleville22.00 Chillicothe1.60.50 Columbus2.52.50 Zanesville1.91.90 Pensions are not subject to city income tax

20 In Summary General Fund – Expenses are increasing and Revenue is decreasing Cash carry over depleting Capital Improvement Fund is now at an all time low Logan is not alone in these difficult economic times We need action now! Residents do Not pay tax on pension income.

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