From the Richmond Palladium-Item:
Because of the most recent error, Wayne County taxing units will share $1.8 million in local income taxes, money collected by the state that should have been distributed to counties in 2011 and in the first three months of 2012.
Union County taxing units will share about $115,000. Randolph County units will receive $656,500. Accrued interest through Thursday also will be paid on those funds.
The revelation that the Department of Revenue owes Wayne County money is good news, Wayne County Council President Gary Saunders said, especially since the DOR claimed last year that counties owed the state because of its overpayment of local income taxes.
"Last year, they said we had to pay back money. When I looked at those figures, it didn't sound like we should be losing any money," Saunders said. "I wasn't comfortable with it. It seemed like we should have been collecting more, not less."
Wayne County employees are now in their third year without a raise. Saunders said there likely won't be a shortage of ideas for ways to use some of the extra funding.
"We've been so cautious the last two years about any spending," Saunders said. "We've taken a frugal attitude. We'll look at this real hard before we make any decisions."
Richmond Mayor Sally Hutton was cautiously optimistic about the additional funds, estimated at about $450,000 for the city.
In the past, the state has required extra funds go to the Rainy Day Fund, but since this money should have been paid last year, Hutton said she was hopeful it might be deposited in the general fund.
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The error also affects the Trust Balance Accounts for local income tax collections to which Saunders referred. The negative balances many counties show on their accounts will be much less, according to the IAC email. Counties with deficits faced flat-lined payments or reductions to make up the losses.
"The $509 million statewide deficit at the start of 2011 is actually about $147 million deficit," AIC email said. "This will mean several counties are now showing positive balances."
Richmond controller Tammy Glenn said Richmond was facing reduced income tax payments to make up for the supposed deficit in the trust account.
"We expected to be stuck with that, even as job growth occurred," Glenn said. "Without the income taxes, everything comes out of the general fund, which means streets and parks end up suffering."
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http://www.pal-item.com/apps/pbcs.dll/article?AID=2012204060322
