Work-from-home trend affecting Reynoldsburg finances - The Columbus Dispatch

Summary

Scott Gerfen

ThisWeek USA TODAY NETWORK

Scott Gerfen

ThisWeek USA TODAY NETWORK

While Reynoldsburg’s tax revenue is at its highest level, those who oversee the city’s finances are seeing a troubling trend: Today’s work-from-home employees will eliminate more than $5 million in annual income-tax revenue.

“That’s going to be a permanent hit to our revenue,” city Tax Administrator Lori Gischel said when updating City Council about midyear finances July 25.

“It’s going away, and what it’s stemming from is that people who were at our large employers are now working from home in other taxing jurisdictions,” she said.

Cities depend on income taxes to pay for services such as police, firefighters, road repairs and more.

Reynoldsburg has been monitoring 11 of its top 20 employers, which had been producing steady growth in income-tax withholding collections, climbing from $6.4 million in 2017 to $10.9 million in 2021.

However, Gischel estimated that in November 2021, annual withholding collections for 2022 would be $5,039,416 for those employers. After reviewing data through the first six months of the year, the estimate is now slightly higher, $5,055,957, she told council.

One of those top employers, Victoria’s Secret, announced earlier this month that it was eliminating 160 management positions at its Reynoldsburg headquarters in order to unite three lines – Victoria’s Secret, PINK and Beauty – under one umbrella.

The move is expected to bring $40 million in cost savings, the company said.

That equates to a $1 million income-tax loss to Reynoldsburg, Gischel said.

But the news wasn’t all bleak.

Fiscal Finance Manager Joni Crawford reported that tax revenue was $1 million higher than at this time last year. Of the $14.9 million collected so far, $12.9 million is income-tax revenue, she said.

But City Auditor Stephen Cicak explained, “This year, and this year alone, our net profit taxes collected from 2021 are up 114% but are still subject to refund. That explains why we are up $1 million on paper.”

Expenditures are about $2 million less than last year.

“Thankfully, we have prepared for the potential loss as noted with a reduction in spending of over $2 million, but as you heard, even with that loss, we are over $1 million above where we were at this time last year – itself the highest revenue-generating year in the history of Reynoldsburg,” Mayor Joe Begeny said. “We will continue to monitor revenue in real time and, of course, continue to attract new businesses, grant opportunities and state or federal funding.

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Work-from-home trend affecting Reynoldsburg finances - The Columbus Dispatch
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