Taxes from Increase to be Withheld Beginning in October
Shaker Heights Finance Director Bob Baker says those who work in the city will notice more taxes taken from paychecks in pay period that includes Oct. 1
The impact of voters' approval of Issue 1 will be reflected in paychecks in about seven weeks.
Additional taxes from the 0.5 percent increase will be withheld from the pay of people who work in Shaker Heights beginning during payroll periods that include Oct. 1, finance director Bob Baker said. Those who do not withhold taxes from their paychecks will likely pay the increased amount on their 2012 tax returns next April.
"I was pleased that the citizens understood the situation and agreed to increase the tax," Baker said.
Finance Director Bob Baker said a household earning $50,000 will pay $21 more per month than they had prior to the increase. The total annual bill, now about $875, will rise to $1,127.
Baker said the city doesn't expect to receive the full, expected $6 million from the now-2.25 percent income tax until 2014. The Regional Income Tax Agency gave the city a smaller estimate for receipts in 2013. The city pushed for an increase to replace expected losses from cuts to the state local governments fund and the repeal of the estate tax.
"I don't think it's a problem because although the estate tax is repealed, effective Jan. 1, 2013, that's only for people who die on or after Jan. 1," Baker said. "Anyone before that is still going to pay the tax. There will be taxes paid in 2013, obviously not the full amount, but there will be taxes paid.
The balance between those monies and those from the tax increase will balance out."