The cities of Groveport and Canal Winchester are bracing for possible reductions in income-tax revenue as Ohio jobless claims skyrocket and businesses ranging from restaurants to retail remain closed due to the COVID-19 coronavirus pandemic.
"Come June, July and August are when I think we'll have a better understanding of how the change in income taxes has played out," said Jason Carr, Groveport finance director.
Income taxes make up more than half of Groveport's total revenue, he said.
As of March 31, gross income-tax revenue was $4.8 million, or 7.6% higher than the first three months of 2019, Carr reported to Groveport City Council.
In November, Carr estimated that income-tax revenue was expected to increase to $18.73 million this year -- up 6% over last year's estimate.
Much of Groveport's income-tax revenue comes from warehouses operating in the Groveport Commerce Center. Jeff Green, the city's development director, had not reported any layoffs or furloughs from those companies as of April 22, Carr said.
But that does not tell the whole story.
"While we have people working in our warehouses, are those businesses profitable and were their inventory chains impacted by the virus?" Carr said. "Those are the questions that we don't have answers to right now."
Although income-tax collections in Canal Winchester are up about 13% or $300,000 compared to this time last year, city finance director Amanda Jackson said collections are expected to decrease over the coming months.
The Regional Income Tax Agency, which collects income taxes for municipalities in Ohio, including Canal Winchester, projects the city will see losses of approximately $650,000 in tax revenue and an additional $850,000 in delayed collections, according to Jackson.
"The lost revenue amount equates to 9% of original revenue expectations for 2020," she said. "We are currently assessing our planned expenditures for 2020 to determine what we are contractually obligated to expend and what could potentially be postponed."
However, Jackson noted that the city ended 2019 with a "fund balance of $10.5 million, which is more than sufficient to cover an entire year's worth of general fund expenditures."
The outlook elsewhere isn't as rosy.
The Ohio Department of Job and Family Services reported more than 109,000 initial jobless claims to the U.S. Department of Labor for the week ending April 18. The number of initial jobless claims filed in Ohio over the last five weeks is nearly 1 million.
"When people aren't working and people aren't making money, the municipal-income tax is dead," said Kent Scarrett, executive director of the 730-member Ohio Municipal League.
And with the extension of the tax-filing date until July 15, it might be even more harmful, he said.
Franklin County officials have asked the state to allow delayed collection of mid-year property-tax payments, which are due June 22.
School districts, municipalities, townships, counties, libraries and others rely on property taxes.
"The impact that will have on the township is pretty straightforward," Susan Brobst, Madison Township administrator, told trustees during their April 14 meeting. "It would mean an additional two months before we see any additional revenue through the property-tax process.
"That would take us into early October before we would have any additional property-tax money," she said.
The Columbus Dispatch reporter Bill Bush contributed to this story.