Gahanna's income-tax revenue reached a historic high in 2011 with a total cash collection of $15.4 million, according to finance director Jennifer Teal.

Gahanna's income-tax revenue reached a historic high in 2011 with a total cash collection of $15.4 million, according to finance director Jennifer Teal.

During a Feb. 27 council committee meeting, Teal presented the 2011 year-end financial review, focusing on the general fund.

She said the 2011 income-tax collection surpassed by $834,000 the city's all-time high of $14.6 million that was collected in 2007.

Teal said Gahanna has collected $1.9 million (14.4 percent) more in income taxes than the city had planned for 2011 and $2.7 million (21.5 percent) more than was collected in 2010. Income taxes, collected at a rate of 1.5 percent, are Gahanna's largest source of revenue.

Teal said the increase could be attributed to an increase in the city's tax base (those paying and the amount paid) and, in part, to the Regional Income Tax Agency's (RITA) enhanced enforcement efforts in 2011.

Through Dec. 31, 2011, Gahanna collected $25 million in general-fund revenues from all sources on a cash basis. That amount exceeded the city's initial plan for 2011 by $2.6 million (11.9 percent) more than was expected. The amount also exceeds the 2010 general-fund collection by $1.5 million (6.7 percent).

Teal said the city conservatively estimated collections because of the poor economy.

She said it appears 2011 signaled the end - at least, in the short term - of the decreasing trend in local revenues associated with the national economic downturn.

"While revenues have not rebounded all the way to the pre-recession levels, this significant increase over 2010 is certainly encouraging," she said.

Teal said this would be the last year of the estate tax in Ohio.

"While this particular source of revenue isn't one the city has consistently relied upon, the loss of approximately $300,000 in estate-tax collections per year will certainly be felt," she said.

General-fund expenditures for 2011 totaled $22.7 million, which is $2.9 million less than planned and 1.8 percent lower than for 2010.

Teal said general-fund revenues exceeded expenses by $2.3 million in 2011. This amount contributed to the city's healthy unencumbered general-fund balance of $15.2 million at year's end.

"The significant increase in tax collections for 2011 signals that Gahanna's local economy is recovering," Teal said. "While that news is encouraging, there are still looming revenue issues that will continue to impact the city in 2012 and beyond."

Now that it appears Gahanna's revenue base has stabilized, Teal said, the administration will develop a capital-improvements plan that begins to restore capital investments. She said that plan would be released in the coming weeks.