After a few years of staying relatively flat, Kent’s income taxes are steadily rising in 2012.
City income taxes are up 5.5 percent, or about $261,000, more in May 2012 than they were in May 2011.
“We’re saying we’re doing better than a year that also was a year of recovery,” Finance Director Dave Coffee said. The city’s total income tax collections were up about 2.5 percent in 2011 over 2010.
Coffee thinks the city will finish the year with about $400,000 more than expected.
“That again would be better than a 5 percent increase, which we’ll certainly take in these economic times,” Coffee said. “Everything’s relative in size. The city of Kent’s overall budget is not that big to begin with so $100,000 here, (or) $100,000 there is a significant number for us and not to be dismissed one way or the other.”
In April, the city collected $1.2 million, the of income tax receipts in the past 28 months.
Revenue Rises with Redevelopment
Higher collections this spring means the trend of flat revenues is reversing.
The city’s total income tax revenue four the past four years was:
- $10.8 million in 2008
- $10.48 million in 2009
- $10.45 million in 2010
- $10.7 million in 2011.
“We started to see a reversal of that trend in 2011 and that trend is continuing to the present,” Coffee said. “We’re showing a resurgence going on in our local economy, which certainly we’re happy to have. We don’t want to get too far ahead of ourselves, but we’re happy for where we’re at right now.”
The city is starting to recoup some of the money it invested in through income tax revenue from construction workers, economic development director Dan Smith said.
As of June, the city collected about $5.9 million in income taxes so far this year. The city originally projected $10.9 million in revenue for the entire year, and because of growth so far this year city officials are now projecting $11.4 million in total revenue for 2013.
Smith said the uptick and positive forecasts mean Kent is starting to see the effects of the more than $100 million downtown redevelopment construction that started at the end of last year.
Jobs boost collections
The investment will continue to pay off as about 850 construction jobs from the past 18 to 24 months will transition to 700 to 800 new, permanent full- and part-time jobs downtown. Some of larger employers creating new jobs in Kent include , and . AMETEK, the second , is relocating from within city limits.
Included in the mix is Portage County’s largest employer, .
“Without question, Kent State University is an economic engine that helps level (city income taxes) off,” Smith said. “When the economy gets bad, we’ve seen an influx of new students coming into town. It was that energy that helped us put together the downtown Kent revitalization project.”
From December 2010 to spring 2012, the university implemented a hiring freeze. That kept tax withholdings from university employees steady but slightly down because of unfilled positions — after years of gradual increases. Income tax withholdings from the university accounted for about 40.8 percent of total income tax receipts in 2010, 39.6 percent in 2011 and 36.6 percent so far in 2012.
Coffee said he saw a 1.4 percent increase in income tax revenue from Kent State since the .
Still Work to Do
City officials are leaving vacant employee positions empty, completing an energy conservation audit and looking for ways to share services and equipment with nearby communities. Officials are also only putting the city charter's minimum requirement of 25 percent of income tax revenue into capital projects expenses. The rest is being directed to the general operating fund.
Since 2008, the city has been using reserve funds to help cover budget deficits. As a result, the reserve cash dwindled from $12.7 million at the end 2008 to a projected $6.3 million for 2012. Coffee said a has accelerated projections of burning off that balance.
And, in November voters will decide on a to pay for a new police station the city otherwise couldn’t afford.
“This economy isn’t going to be down forever,” Coffee said. “We’ll be well postured when recovery gets into full swing, if you will, to be a real destination. And I believe it will further incentivize other (businesses) to come in and want to build on what exists here already.”
The downtown redevelopment is just the beginning. City officials are hoping all the downtown development and activity will help continue the momentum to attract more businesses to Kent and bolster city finances.
Smith said the city is working to repurpose and fill vacant commercial and industrial properties. When AMETEK moves downtown, the city takes ownership of its Lake Street plant and plans to redevelop the space with new businesses. The vacant space on Mogadore Road is being targeted for modeled on the Centennial Research Park, which is at full occupancy.
The city doesn’t keep track of occupancy or vacancy rates, but Smith does maintain an updated document of available private properties for redevelopment. There’s about 40 available properties now. About 30 from 12 to 18 months ago have been repurposed and are occupied with new tenants, and Smith’s answering calls every day about other properties.
If a retail storefront isn’t occupied at the moment, there’s a good chance the building owners have plans to put somebody in it — and renting at a higher rate. That, Smith said, gives building owners revenue to reinvest in their properties, such as the and ’s awnings.
The level of activity that’s happening is good for everybody, Smith said, because it makes Kent more of a destination.
“I think the city knew with the recession and income taxes declining, if we did nothing it was going to continue to spiral down, and I have to say it appears the investment we’ve made and the vision to move forward has proven correct,” Smith said of the development downtown.
“At the end of the day, I would say this project is positioning us to come out of the recession quicker and to capture the potential that I think has always existed in having a genuine college town experience that the city of Kent is going to have once these projects are completed,” he said.
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