Corporate profits

Business profits soar in Dayton

In the first half of this year, Dayton collected $ 74.7 million in tax revenue, an 11.2% increase from the same period in 2020.

Of course, the past year has been unusual due to the coronavirus crisis, and income tax collections have plummeted as the business community has gone into lockdown mode, with either a cut or a shutdown.

However, Dayton’s income from its income tax is also up significantly in the first two quarters of this year compared to 2019 (+ 8%) and 2018 (+ 10.5%).

Income from withholding taxes increased 3.6% from a year ago to $ 62.9 million.

But corporate profits are the real story: These collections soared nearly 65% ​​to $ 9.4 million.

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Corporate income tax collections are up 65%. CONTRIBUTED

Half of the increase in income tax collections comes from corporate profits, and city budget officials say corporate profits have been the main driver, not partnership revenues.

What is happening in Dayton is not unique. Quarterly profits for U.S. companies rose sharply in late 2020 and early 2021, according to the U.S. Bureau of Economic Analysis.

Some local industries were devastated in 2020, while others thrived, but overall there has been positive growth this year, said Holly Allen, vice president of marketing and communications at the House of Commons. Dayton area trade.

“We have seen promising trends in all areas,” she said. “For the most part, existing businesses are doing well, regardless of how the worst of the COVID pandemic has affected them. “

Dayton City Hall on West Third Street.  CORNELIUS FROLIK / STAFF
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Dayton City Hall on West Third Street. CORNELIUS FROLIK / STAFF

Many business leaders say the only thing stopping them from having an amazing year is workforce and supply chain issues, she said.

To address supply shortages, employers are trying to get creative with innovative ways to attract and keep talented workers, she said, and the chamber is working with companies on large-scale solutions. .

Dayton has seen significant employment growth in new warehouses, distribution facilities and industrial facilities around the Dayton International Airport.

The City and County of Montgomery are hosting an airport job fair on Tuesday to connect job seekers with job opportunities around the aircraft facility, including Crocs, Chewy, Frito-Lay and several airlines.

City of Dayton monthly income tax collection data.  CONTRIBUTED
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City of Dayton monthly income tax collection data. CONTRIBUTED

In addition, in particular, new business declarations have broken records as many people have decided to start new businesses and pursue their entrepreneurial dreams at a time of uncertainty in the labor market and the economy. in general.

Shannon said it was unrealistic to think the city will continue to see such explosive growth in tax revenue from corporate profits.

The city’s general fund could also take a hit, as around a quarter of workers now work remotely and many may never return to the office, city officials said.

“We can take advantage of these robust gains, driven by corporate earnings, but it’s not sustainable,” Shannon said.

Dayton has received nearly $ 138 million in federal rescue funds, and the city has estimated it will need to spend about $ 16 million on revenue replacement to make up for financial losses from the pandemic.

But this is one-time money, and the city needs long-term budget solutions if working from home puts pressure on general fund income, officials said.

Dayton must continue to consider cost containment measures until the city has a better idea of ​​the funding it stands to lose due to changes in working arrangements, said Shelley Dickstein, City Manager of Dayton.

“While it’s great to have this kind of revenue growth, I’m still very concerned about the expenses and how to handle the future if some of these threats really do develop,” she said. .

Businesses have made strong economic gains, but local payrolls have risen again significantly to pre-pandemic levels.

About 376,600 people were employed in the Dayton metro area in June, down 18,300 jobs from January 2020, before the pandemic took hold, according to preliminary data from the United States Bureau of Labor Statistics.

The metropolitan area includes the counties of Montgomery, Miami and Greene.

Metro Dayton is seeing job growth, but payrolls remain below pre-pandemic levels.  CONTRIBUTED
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Metro Dayton is seeing job growth, but payrolls remain below pre-pandemic levels. CONTRIBUTED

The leisure and hotel industry employ 2,800 fewer workers than in January 2020 (-7.3%).

The manufacturing sector has 2,100 fewer workers (-4.8%); government, -2,800 workers (-4.5%); and education and health care, -4,100 fewer employees (-5.4%).

Construction has added 1,500 people to the payroll since the start of 2020 (+ 11.4%), while trade, transport and public services have gained 1,900 workers (+ 2.9%).

Construction is booming in the area, with entirely new projects, additions and expansions. The commerce, transportation and utilities industry accounts for most of the new jobs around Dayton Airport.

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