Pandemic’s effect on tax revenues expected

Larry Limpf

Municipalities and school districts relying on income tax revenues for funding operations are bracing for a drop.
Elmore mayor Rick Claar said village officials are anticipating a drop and have begun looking at making some adjustments to reflect the lower collections.
“At this time, we are not seeing any drop in the income tax revenues mostly due to the fact that the Regional Income Tax Agency serves as our income tax collection agency. Figures from R.I.T.A. are given to us about a month after they have collected the previous month's taxes,” he said. The village income tax rate is 1.75 percent.
Marc Glotzbecker, Gibsonburg administrator, said the village has eliminated all overtime in every department and initiated spending freezes in some areas of operation. Also, some employees have voluntarily deferred wage increases.
“Right now, it’s hard for us to gauge drops in income tax revenue as the original filing date was last week and even though the state and federal deadlines have been moved to July, we have still been conducting income tax business over the phone and through documents that have been dropped off or mailed,” he said. “Do we believe that we will be affected? Most definitely and without a doubt, but we feel that we will really be able to have a better idea of the effects of the pandemic in the coming weeks and months.
“Even in ‘good times’ we are always diving deep into the budget to see where we can realize savings, so we will continue to do so moving forward and make further adjustments as needed, which we believe will have to be done. Like everyone else, we’re cautiously approaching all of this. Hoping for the better days ahead to arrive sooner rather than later, but we’re going to do our absolute best to provide the best possible services throughout the pandemic.”
The Gibsonburg tax rate is 1 percent.
Walbridge mayor Ed Kolanko said the village saw about a 30 percent decrease in tax revenues in March from the March 2019 collection of $85,712.
The village has a tax rate of 1.5 percent.
“We feel this is due in part to the tax filing deadline being pushed back to July 15. We will have a better assessment of the financial picture in August. But I do see a negative impact to our revenues. How much is yet to be determined. We have been, and will continue to, look at cost cutting measures. I am hopeful there is support from the federal or state governments for relief funding as there were for other private sectors,” he said.
In the Eastwood school system, Brad McCracken, district treasurer, has been crunching numbers and doesn’t like what they’re projecting.
He isn’t expecting the district’s next income tax distribution from the state, which will include collections from late December 2019 through March, to reflect the shuttering of so many businesses due to the pandemic. But the distribution for the second quarter will.
“We’ve been doing some modeling based on what happened in 2007-08 and estimated we had a drop of about seven to nine percent when spread over the course of a full year,” McCracken said. “This one could be a drop of 10 percent of more when spread over a year.”
“We are worried,” he said.


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