Leaders say the city will keep those commitments, even if a recession or downturn hits and income tax revenue tumbles.
Dayton City Manager Shelley Dickstein this week released a $182.4 million general fund budget proposal, up $7.1 million from the revised 2018 budget.
The numbers are projections. The city’s original 2018 budget was $173.8 million, but the city this year is on pace to collect almost $176.8 million in general fund revenue.
“We’ve been just giddy with the fact that our revenues have been outperforming” the original estimates, said Shannon.
Dayton’s income tax revenue reached a record high of about $122.4 million in 2017.
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This year’s collections are expected to exceed $127.8 million. Next year, the city projects bringing in almost $129.6 million.
The growth in collections is powered by the income tax increase that Dayton voters approved in 2016, which raised the earnings tax to 2.5 percent from 2.25 percent.
Shannon said Issue 9, the income tax increase, alone is projected to bring in nearly $13 million next year. The city originally estimated the increase would generate about $11 million per year over the eight-year levy period.
But Shannon said the city’s projections assumed there will be an economic downturn at some point over eight years.
The city is trying to be proactive by adding $1 million to $2 million to its cash reserves as part of its final 2018 budget to prepare for a future recession, Shannon sad.
The city can beef up its cash savings because expenditures this year came in under budget, she said.
Dayton City Commissioner Matt Joseph said this is the largest amount of money he can remember the city putting into its savings during his 15 years on the commission.
A few years ago, he said, the city’s financial projections were far less rosy and the expectation was that a recession would have happened by now.
“We are doing quite a bit better than we forecast,” he said. “But with that said, the recession could come any minute.”
Joseph, however, said he’s not worried about a downturn because it is a normal part of the economic cycle and the city’s in good financial shape and prepared.
The city’s income tax collections are expected to grow 1.4 percent next year from the revised 2018 budget. Shannon said the projection would be higher if not for the closure of Good Samaritan Hospital.
The city estimates that it is losing about half of the Good Sam jobs, Shannon said. Good Sam shut down in July.
The revenue growth has been good news, but it has not come close to keeping up with inflation in the last 17 years, Shannon said.
She said there is nearly a $71 million gap between the city’s purchasing power and revenue.