“Upon further review, the failure of the settlement program was discovered and it was determined that this payment should have been distributed to the city of Kettering in 2011,” Keith said.
“Karl Keith said he had some news for me that I might be interested in and he stopped by my office Nov. 14. I was a little stunned. We did not know this money was there,” Kettering City Manager Mark Schwieterman said.
According to Matt Cox, executive assistant to the auditor, “The next largest estate tax distribution we have found was about $9 million.”
Boonshoft’s estate tax payment totaled $55,058,702. Twenty percent of it, or $11,011,740, goes to the State of Ohio. The remaining 80 percent goes to Kettering.
The distribution is being made even though the state legislature repealed the estate tax effective Jan. 1, 2013.
“There are still a few others on the books from before the change in the law,” Cox said. “We have one that goes back to 2003. Sometimes the money can be held in escrow if an estate is in litigation.”
For each of the past 10 years, the city of Kettering received an average of $3 million a year from the estate tax.
The city’s annual budget is between $80 million and $100 million, depending on the amount of capital improvements it makes. Its largest source of revenue, income tax, brings in about $40 million a year.
Schwieterman said Kettering’s practice has been to put most of the estate tax amount into the city’s capital improvement fund, with $100,000 going into each year’s general fund.
He said the $40 million, which was deposited with the city’s bank Tuesday, will adhere to the same official policy.
City officials plan to discuss how the money will be incorporated into the 2014 budget and plans for the future.
“It will certainly aide the city in replacing the lost revenue” because of the end of the estate tax “and assist in stabilizing our capital improvement fund for years to come,” Mayor Donald Patterson said.
The fortune of Boonshoft, an armaments engineer and trader in commodities futures, has had a major impact on the Dayton area.
The Boonshoft Museum of Discovery, the Marjorie and Oscar Boonshoft Center for Jewish Culture and Education, the Boonshoft Center for Medical Sciences at Kettering College of Medical Arts and the Boonshoft School of Medicine at Wright State University are some of the institutions that bear his name.
For deaths before Jan. 1, 2013, most estates with a total value of more than $338,333 were subject to a 6 percent tax in Ohio. The rate was 7 percent for those above $500,000.