Mentor income tax revenue was up 13.4 percent through June 2012 over June 2011.
Finance director David Malinowski expects revenue to stabilize through the end of the year and doesn’t expect a dramatic change.
“The measurements of 13.4 percent are off of 2011 revenues, and 2011 was a very good collection year for us,” Malinowski said. “It’s impressive when you’re measuring 2012 revenue off a year that was a banner year. That we’re still seeing such an increase in revenue does show a strong local economy currently.”
Total income tax revenue for the past four years was:
- $32.2 million in 2008
- $30.6 million in 2009
- $30.6 million in 2010
- $33.2 million in 2011.
Through June this year, the city collected $19.3 million.
“Income tax collections are going to be a function of your employment and overall business climate,” Malinowski.
The city saw a decline in municipal income tax revenue in 2009 and 2010 and started to improve last year.
“We’re beginning to see growth and restoration in our municipal income tax revenue stream, and that’s attributable primarily to economic development activity,” Malinowski said.
Ronald M. Traub, economic development director, said the city also has seen an improvement with vacancy rates. Mentor has about 3.4 million square feet of retail zoned land and saw vacancy rates increase from 6 percent in 2008 to 8 percent in 2009 and 2010 and then 7 percent in 2011.
Traub said one challenge in measuring the city’s industrial zoned land is the large amount of land in three industrial dinosaur buildings along Tyler Boulevard, including the former Caterpillar building.
“When one looks into industrial vacancies, one needs to take into account we’ve got almost 2 million square feet of, even in the best of times, difficult industrial property to sell (in those three buildings),” Traub said. Portions of those buildings are occupied, though there is still plenty of room for other tenants.
As for the rest of Mentor’s industrial land, Traub has seen a decrease in vacancy rates but not back to 2008 levels.
“The curious thing that we’ve noticed, particularly in the last several months, is in addition to both commercial and industrial buildings being offered for sale or more frequently for lease is more help wanted signs,” Traub said.
STERIS Corporation and Wiseco Performance Products are looking for upwards of 100 employees each. Other companies have a number of openings as well.
“Today I had a meeting with a company that has probably 10 openings and a company yesterday that has perhaps 10 to 15 openings, so the number of job opportunities is increasing,” Traub said. “That’s true not only in industrial but in the retail sector as well. This afternoon, I had occasion to speak with management at the Great Lakes Mall, and they indicated that almost every retail store at the mall is in need of personnel.”
That’s in addition to a number of and a coming to town.
In short, it’s all good news for Mentor as income tax revenue is predicted to make up about two-thirds of the general operating fund of just over $51 million. That money is then spent on city services.
“The only reason why the city is able to provide the level of service that they do is that we have this source of revenue from our municipal income tax and the taxpayers,” Malinowski said.
He said the majority of residents recognize this and is why they vote in support of the 2 percent income tax renewal every five years.
“We’ll continue to provide the same, if not better level of service, for residents. The vast majority of voters are happy with the way their money is being spent,” Malinowski said.
He acknowledges providing the same amount of service without passing costs onto residents has always been a delicate balance, one that will continue in the future with reductions in state funding.
“We’re making up what we’re losing with state shared revenue with income tax collections. That’s not necessarily the case when you look at the overall case and overall revenue stream,” Malinowski said. “I think the most important thing is we’re happy about the fact that municipal income tax collections are up, and that reflects our local economy.”
Editor’s Note: In this series, Patch gauges the recovery of 18 Ohio communities based on income tax receipts since the Great Recession. Read about