Politics & Government

Kent's 2010 Income Tax Revenue Hints at Recovery

City tax revenue no longer dropping as it did in 2008, 2009

Is the economic recovery starting? It could be in Kent.

The city's total income tax receipts — local government's primary income source and a general marker of the status of the economy — were down again in 2010 compared to the previous year.

But the drop from 2009 to 2010 of 0.2 percent is marginal compared with the 2.1 percent decrease Kent saw between 2008 and 2009.

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Kent Budget and Finance Director Dave Coffee said that stabilization in Kent's income tax revenue is a signal of the "invisible recovery."

"To a large extent it’s generally acknowledged that the recovery actually began earlier than what it seemed like, what it felt like," Coffee said. "2008 and 2009 was the obvious, the big dip, so to speak. Fortunately we didn’t see so much erosion between 2009 and 2010."

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In December 2010, Kent actually saw an increase in total income tax receipts on a monthly basis compared with December 2009. The increase of $52,676 compares with a drop of $52,957 between December 2009 and December 2008.

Coffee attributed that increase in part to the number of large capital projects under way last year, including construction of the and the reconstruction of a culvert beneath Mogadore Road as part of the construction at .

Still, the one stabilizing factor that can't be ignored is . About 3,000 of the university's 5,000 employees work at the Kent campus.

The contribution of Ohio's second-largest public university to the city of Kent's tax rolls gradually increased month-by-month last year, though that increase has leveled off with a hiring freeze that began on campus in December. Collections on income tax from Kent State are actually down about 1 percent through February of this year compared with last year.

"(Kent State) was undoubtedly the huge stabilizing influence for us," Coffee said. "The very nature of higher education is it tends to be somewhat counter-cyclical to the economy. As the economy declines, typically enrollment in higher education increases. With that came higher funding, payroll for KSU."

For 2011, Coffee said the city is projecting an absolute flat revenue stream. He doesn't expect that the start of construction for several downtown redevelopment projects will bolster the city's tax rolls much this year despite the jobs.

"In all honesty, I don’t see a huge impact on them for 2011," he said. "Those payrolls tend to lag a little bit, so my best guess at this point is we really won’t begin to see any palpable impact on those until maybe fourth quarter this year at most. The majority of that would probably be a 2012 impact."


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