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Income tax revenues falling short

The city has collected around $13.8 million this year through October, reports indicate.

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By Ryan Gauthier, Staff Writer 2:05 AM Sunday, November 22, 2009

MIDDLETOWN — The city of Middletown could see a shortfall in 2009 income tax revenues if current trends continue.

City Manager Judy Gilleland said staff originally had anticipated bringing in $17.5 million over the course of the year, but were forced to drop the bar to $16.5 million when revenues started to come in lower than expected. October reports show the city collecting around $13.8 million year-to-date.

“At this point we’re unable to determine any sort of trend,” Gilleland said. “It’s very possible that we will wind up another half-million dollars less than our revised projections.”

Income Tax Superintendent Sandra Mueller said revenues took a hit due to the increasing number of unemployed residents and decreasing revenues from area businesses. Mueller said she is hoping November and December numbers are closer to those seen in 2008, closing the gap growing gap between estimated and actual collections.

“The last couple of years (revenues have) grown a couple percent, which is making this year look even worse,” Mueller said. “We’re hoping to sort of cut the bleeding and hopefully November and December will help us out, but it’s impossible to tell until the year ends.”

Gilleland said the reality that most departments do not spend every cent appropriated to them should help counterbalance the potential $500,000 hit to the city’s general fund. Concrete numbers are not available yet, but she said it is possible their combined total of returned funds could be close to the lost revenues.

The past year has been a nerve-wracking from a budgetary standpoint, forcing the city to practice extreme conservatism in allocating funding for 2010, according to Gilleland.

“It has been very difficult to establish trends and make sound predictions based upon what we’re seeing,” she said. “But every city is in the same boat and I would say most of the private sector is in the same boat. What we’re experiencing isn’t unique, but it certainly is unsettling.”

Contact this reporter at (513) 705-2871 or rgauthier@coxohio.com.

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