Local Income Tax Continues to Show Weakness

The Office of the Comptroller released its detail of the November distribution of local income taxes.  According to the electronic message, “The November distribution totals $1.272 billion, a decrease of 6% over last year’s 2013 distribution.” This distribution is composed of the following components:

  • 2014 third quarter withholding and estimated payments; and
  • the November adjusted final distribution (a reconciling distribution for tax year 2013).

The adjusted final distribution, which totals $334.4 million, a 27.8% decline from last year, is responsible for the decrease in local income tax revenues.

This distribution accounts for the returns filed through the October 15 filing extension; these returns typically show disproportionately high levels of income. As is typical with reconciling distributions, growth varies widely across the counties. Atypical is the magnitude of the decline, particularly that of Montgomery which accounts for 53% of the decrease.

The Comptroller’s Office attributes this decline to the fiscal cliff and indicates that it will continue to play a role.

If you have any questions about the November 25 distribution, please contact Jim Pasko of the Revenue Administration Division at (410)
260-7521 or Jason Brohawn at (410) 260-6159.

A history of the local income tax distributions to local governments can be found on the Office of the Comptroller’s website.