Upper Arlington gets last benefit from estate tax
A mid-year review of Upper Arlington's finances suggests the city will benefit from an unanticipated windfall from a bygone tax.
While planning for the 2013 budget, city officials frequently warned that the Ohio General Assembly's Jan. 1 elimination of the estate tax -- which had provided an average of $4.8 million annually to Upper Arlington -- would present funding challenges for municipal operations and services.
A recent mid-year review of the 2013 budget by Upper Arlington Finance and Administrative Services Director Cathe Armstrong, however, noted the estate tax will provide a final parting gift.
The estate tax was imposed in Ohio on the transfer of assets to a deceased person's heirs. Originally, Armstrong estimated the city would receive $1 million this year through estate tax settlements from 2012.
As of Aug. 19, Armstrong said, final returns filed with the state showed the city already had $2 million in estate tax receipts, and she readjusted anticipated revenue from the tax to reach approximately $2.8 million this year.
"The tax ended Jan. 1," Armstrong said last week. "So I was just kind of guessing the amount of estates that would be settled this year.
"I amended the estimate to $2.8 million, which is kind of incredible that we would still have that amount coming."
Likewise, Armstrong said there was good news related to income taxes.
According to a staff report she provided to Upper Arlington City Council Aug. 19, individual filings from city residents through July were 19 percent greater than July 2012 receipts.
The report said the estimate for city income tax collections increased by about 15 percent because the Regional Income Tax Agency is processing a large refund for August.
"Net profits have also continued to be strong through the first half of the year and the estimate was increased by approximately 5 percent," the report said. "The withholdings, the largest of the three categories, has varied less than 1 percent of the original budget and therefore was amended as such.
"These adjustments bring the combined income tax estimate to $16.1 million, or 4.7 percent."
The increased projections come on the heels of a record year for income tax collections in Upper Arlington.
In 2012, the city broke the $15-million mark in income tax collections for the first time in history.
Additionally, Armstrong reported the city's 2013 investment-earnings estimates would be increased by $100,000 because gains are outpacing projections.
"We anticipate our revenue now is going to be about $2.6 million higher this year," she said at an Aug. 19 council conference hearing. "That's all going to help the bottom line."
Last December, council approved a $28.8 million operating budget for 2013, proposed by City Manager Ted Staton.
It represented an approximately $310,000 decrease from the previous year and included the elimination of a total of 10 city employees, which Staton said were jobs left vacant following retirements and resignations.
The increased revenue will go the city's operating budget this year, after council unanimously approved a mid-year adjustment Aug. 26.
Armstrong's report recommended using $393,600 of the newly identified revenue for capital equipment, including the purchase of a new camera and transporter for examination and maintenance of the city's sewer lines, the construction of a new road salt storage barn and street light poles.
In approving the adjusted budget, council also approved appropriations for the equipment, but the salt barn project remains on hold as officials seek options for sharing a facility with other municipalities or entities.