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Old 02-23-2014, 12:39 PM
 
2,886 posts, read 4,950,659 times
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Quote:
Originally Posted by kjbrill View Post
First of all Bass Pro is still there as their new store is not built yet and is likely at least a year away.
If as Zen_master says, Forest Park City income tax revenue has dropped 18% between 2008 and 2012 there must be a lot of unemployed or underemployed residents, as it certainly did not all come from lost employees at the mall.
I believe--although I don't know for sure--that income tax is levied on wage-earners within the City of Forest Park (I pay it but don't live there) as opposed to on residents. IOW, the city is losing jobs, not necessarily gaining unemployed residents.

I'm not intending to come across as an advocate for anyone settling there, and although I appreciate the informative link posted by Zen, I think it's probably a better question to ask how Forest Park's revenue situation compares with other similar communities than to look at it in isolation. Lots of cities are hurting in the last few years.
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Old 02-23-2014, 01:53 PM
 
Location: Mason, OH
9,259 posts, read 16,700,854 times
Reputation: 1954
Quote:
Originally Posted by Sarah Perry View Post
I believe--although I don't know for sure--that income tax is levied on wage-earners within the City of Forest Park (I pay it but don't live there) as opposed to on residents. IOW, the city is losing jobs, not necessarily gaining unemployed residents.

I'm not intending to come across as an advocate for anyone settling there, and although I appreciate the informative link posted by Zen, I think it's probably a better question to ask how Forest Park's revenue situation compares with other similar communities than to look at it in isolation. Lots of cities are hurting in the last few years.
Not quite the whole story Sarah. They have been juggling the rate and amount of credit for earnings tax paid to another jurisdiction. Up to 2007, Forest Park had a 1% income tax rate. They would grant a 0.5% amount if paid to another jurisdiction if you worked there but as a resident you still owed them 0.5%. Beginning July 1, 2007 to Dec. 31, 2012 they increased the rate to 1.5% but would give credit for the entire amount if you paid that much or more to another jurisdiction where you worked, so Forest Park got nothing. Even though they increased the rate, the loss of the 0.5% to Forest Park I am sure added up to move than the additional collected from people working there.

Effective Jan 1, 2013 they changed the rules again allowing a tax credit of up to 75% for tax paid another jurisdiction up to a maximum credit of 1.125% on a tax rate of 1.5% or higher. But you would sill owe Forest Park 25% of their rate of 1.5% or 0.375%.

Effective Jan 1, 2014 they changed again lowering the credit for taxes to another jurisdiction to 25% or a maximum credit of 0.375% of the taxes based on a 1.5% rate or higher. But you still will owe Forest Park 75% of their 1.5% rate or an effective rate of 1.125%. I am surprised the voters haven't raised a fit. Let's say you live in Forest Park and work in Cincinnati. Cincinnati is going to collect their 2.1% since that's where you work. Forest Park is coming after their 1.125% so your total city income tax rate is 3.225%

So I think we can see where the bulk of the income tax fluctuation has come from.

We had a smilar situation here in Mason. For years Mason had a 1% income tax rate, imposed on both people working in Mason and residents working someplace else. But Mason would grant a 50% credit for taxes paid another jurisdiction providing their rate was 1% or higher up to a 0.5% limit. This effectively meant paying Mason their 0.5% period. A few years ago, some members of Mason council succeeding in getting on the ballot an ordinance eliminating the 0.5% to Mason for anyone paying Mason's 1.% or higher somewhere else and the voters passed it.That 0.5% doesn't seem like much, but when the majority of your residents work someplace else and it disappears you will feel it.

Last edited by kjbrill; 02-23-2014 at 02:29 PM..
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Old 02-23-2014, 04:08 PM
 
2,886 posts, read 4,950,659 times
Reputation: 1508
Quote:
Originally Posted by kjbrill View Post
Not quite the whole story Sarah. They have been juggling the rate and amount of credit for earnings tax paid to another jurisdiction. Up to 2007, Forest Park had a 1% income tax rate. They would grant a 0.5% amount if paid to another jurisdiction if you worked there but as a resident you still owed them 0.5%. Beginning July 1, 2007 to Dec. 31, 2012 they increased the rate to 1.5% but would give credit for the entire amount if you paid that much or more to another jurisdiction where you worked, so Forest Park got nothing. Even though they increased the rate, the loss of the 0.5% to Forest Park I am sure added up to move than the additional collected from people working there.

Effective Jan 1, 2013 they changed the rules again allowing a tax credit of up to 75% for tax paid another jurisdiction up to a maximum credit of 1.125% on a tax rate of 1.5% or higher. But you would sill owe Forest Park 25% of their rate of 1.5% or 0.375%.

Effective Jan 1, 2014 they changed again lowering the credit for taxes to another jurisdiction to 25% or a maximum credit of 0.375% of the taxes based on a 1.5% rate or higher. But you still will owe Forest Park 75% of their 1.5% rate or an effective rate of 1.125%. I am surprised the voters haven't raised a fit. Let's say you live in Forest Park and work in Cincinnati. Cincinnati is going to collect their 2.1% since that's where you work. Forest Park is coming after their 1.125% so your total city income tax rate is 3.225%

So I think we can see where the bulk of the income tax fluctuation has come from.

We had a smilar situation here in Mason. For years Mason had a 1% income tax rate, imposed on both people working in Mason and residents working someplace else. But Mason would grant a 50% credit for taxes paid another jurisdiction providing their rate was 1% or higher up to a 0.5% limit. This effectively meant paying Mason their 0.5% period. A few years ago, some members of Mason council succeeding in getting on the ballot an ordinance eliminating the 0.5% to Mason for anyone paying Mason's 1.% or higher somewhere else and the voters passed it.That 0.5% doesn't seem like much, but when the majority of your residents work someplace else and it disappears you will feel it.
Wow. That is a lot more complicated than I realized!
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Old 02-23-2014, 09:01 PM
 
Location: Mason, OH
9,259 posts, read 16,700,854 times
Reputation: 1954
Quote:
Originally Posted by Sarah Perry View Post
Wow. That is a lot more complicated than I realized!
I found the information on income tax on a Forest Park City website, covering the period from Jan 1, 2007 to current. The first half of 2007 their tax rate was 1.% with a up to .5% credit to residents working someplace else and paying at least .5% there. But this left the resident still owing .5% to Forest Park.

The second half of 2007 through the end of 2012 they raised the rate to 1.5% but would grant a credit of up to 1.5% to a resident working someplace else and paying up to 1.5% there. I believe this is what caused their big drop in income tax revenue. Even though they were collecting an additional .5% from people working in Forest Park the fact is they were losing the .5% from Forest Park residents working someplace else. I suspect there were a lot more residents working someplace else and now paying Forest Park nothing than the additional .5% from people working in Forest Park.

I believe they realized the error in their ways which is why they changed the regulation in 2013 only granting a credit of up to 75% based on a 1.5% rate to residents working elsewhere, giving Forest Park an income tax of .375% from those residents. Apparently they decided this was not enough and changed the regulation again in 2014 to only grant a credit of 25% up to a tax rate of 1.5% insuring Forest Park would collect 1.125% from those citizens. This should put them on a more solid footing. Surprising to me it apparently only took a vote from city council to effect these changes and no vote from the residents.
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