Work-from-home plans could affect Twinsburg tax revenue
TWINSBURG — Although the first month of 2022 ended with about $250,000 more in income tax revenue than those collected in January 2021, it’s unclear what the income tax revenue chart will look like. income of the city over the year.
Chief Financial Officer Sarah Buccigross told Council and its Finance Committee on January 25 that the city collected just over $2 million in income tax in January, compared to $1.75 million dollars in 2021.
However, it is unclear at this time how more people working from home rather than local offices will affect income tax collection in the long term. In 2021, collections amounted to $22.99 million, compared to $22.5 million in 2020.
Buccigross reported that Cardinal Health, the city’s largest employer with just under 1,000 workers, has informed the city that about 90% of its workforce will work from home this year, with 80 people continuing to work. in the company’s local offices, about 50 of whom live in the city.
Other companies could follow a similar plan. In fact, Buccigross noted that the landlord of the offices occupied by Envision Rx, the city’s second largest employer, has indicated that the company may not renew its lease because it no longer needs the space.
Buccigross said Regional Income Tax Agency information last year indicated that for every 10% of people switching to a work-from-home schedule, the city would lose 3% of its tax revenue.
However, Twinsburg residents who work from home rather than offices in other communities could offset some of the potential loss since they would pay taxes to the city.
She said city officials won’t have any idea how much revenue could be lost until the second quarter of this year. Director of Community Planning and Development, Larry Finch, checks in with local businesses on their plans.
Buccigross told the finance committee that 2021 saw the city’s general fund balance drop from $11.7 million to $12.4 million, and the all fund balance from $22.2 million to $28.49 million.
“This increased balance will help offset some of the expected tax loss,” she said.
Sewer revenue and sewer improvement funds increased by approximately $3.76 million in 2021, and the city received $987,592 in funds from the American Rescue Plan Act.
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