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Twinsburg Economy Still Recovering from Chrysler Plant Closure

City trying to attract diverse new employers while operating with less money

Editor's note: There was an error in how much the city would collect in 2012. That number has been corrected and is reflected in the story.

Twinsburg collected about $4.5 million (Editor's note: This number has been corrected) more in income taxes through June 30 than it did the first half of 2010.

Income tax collections for the end of 2012 are estimated at $20 million. (This story has been corrected from a previous version). 

The city has collected about $13.6 million this year.

Total income tax revenue for the past four years:

  • $17.9 million in 2008
  • $17.1 million in 2009
  • $18.9 million in 2010
  • $19.9 million in 2011

When Chrysler closed in July 2012, the city lost about $2.2 million in annual income tax withholdings. Income taxes account for about 82 percent to 85 percent of city operations, director of finance Karen Howse wrote in an email.

The majority of operating expenditures pay for personnel, police and fire departments, administration and public works.

“When the automotive industry went down, of course it took Chrysler with it, and it took other part suppliers in the area with it,” economic development director Larry Finch said. “Because this area in Northeast Ohio had so many auto-oriented businesses in it, it really hurt this area dramatically.”

In 2009, Chrysler announced the plant would close and immediately started laying off employees.

City income tax collections typically lag a business quarter or two while the changes trickle down throughout the economy. Because Chrysler accounted for such a large part of income tax revenue, the city started to feel the drop right away.

When the plant closed in July 2010, 1,268 people had lost their jobs, including 533 from Summit, 236 from Portage and 206 from Cuyahoga counties.

“It was like the coup de grâce for our budget,” Finch said. “It took $2.2 million dollars out of a $17 million dollar budget.

“You can also see declines in most every other industry in the community because of a lack of demand for products because of the recession,” Finch said. “And, of course, housing starts were down to zero, so there was no new construction in housing.”

The city applied for and received grant money to complete a nearly year-long study on the loss of plant revenue both inside and outside the city.

The study found the plant’s closure meant more than $39 million in total lost wages from all employees both in and out of state. Finch tried calculating the effect on supplier network companies — anyone aside from Chrysler who built a part used in car manufacturing. He identified 76 firms and was able to contact 33 companies; he found 12 had phone numbers that were disconnected or no longer in service.

To recoup the loss from the Chrysler plant, residents approved a 0.25 percent income tax rate from 2 percent to 2.25 percent effective January 2010. That additional quarter percent yields about $2.7 million a year.

Since then, a number of new or growing existing industries such as medical and health care, general manufacturing and instruments and controls have given the city a boost.

The Chrysler plant property owner, city and state are also working to redevelop the 2.2 million square feet of plant space that sat on 167 acres. The city was awarded $3 million from the Clean Ohio Revitalization Fund to clean the site of contaminants from decades of manufacturing. The property owner will execute the remediation. In addition, the city was awarded $2.2 million for public infrastructure projects that will pay for paving roads, installing sewer and water lines and landscaping.

Once the plant’s remaining 400,000 square feet of debris is removed, the state will parcel out land to create Cornerstone Business Park. The first tenant, Vistar, a division of vending machine distributor Performance Food Groups, has already signed on.

Meanwhile, the city is trying to get more activity around the Square, including the former Kent State University Geauga Campus, and fill openings in the Canyon Falls Corporate Office Park off Aurora Road.

“We’re getting to the point where the city is almost built out,” Finch said.

There are few commercial properties available and several smaller commercial projects moving forward. Finch estimated industrial land in the city is close to 90 percent occupied and residential is about 95 percent occupied.

For those rare vacant buildings, the city has a community reinvestment program to help fill them. Goodrich and Windstream have both taken advantage of the program where the city issues a grant equal to a portion of what the business paid in income taxes the previous year.

As a result of these efforts, Howse said the city has managed to grow the general fund revenue while keeping expenditures lean.

“As of today, the city’s year to date income tax collections is up by 23 percent over last year,” Howse said. “It is our hope that as (the) economy improves, business performance will too and in turn so will the city’s income tax.”

Editor’s Note: In this series, Patch gauges the recovery of 18 Ohio communities based on income tax receipts since the Great Recession. Read about

The Truth August 27, 2012 at 11:38 AM
This article makes no sense!!! How does Twinsburg collect $3.5 million more already this year and then state it will be down by the end of the year? It looks like Twinsburg is about to have its best year ever. The last paragraph finally mentioned that "income tax collections are up 23% over last year" Who writes this crap?
Dave August 27, 2012 at 01:56 PM
OK, a few things that don't make sense to me. 1) If $3.5 mil more has been collected through June of this year compared to 2010, what in the second half of the year is going to cause tax collections to be $5 mil less than 2010? 2) If $13.6 mil has been collected through June, and collections are estimated to be $5 mil less than 2010, it does not seem reasonable that only $600,000 is going to be collected over the last six months of the year. 3) Ms. Howse says that income tax collections are up 23% this year compared to last year. What is being done with that money? Hopefully building reserves so that the 1/4% income tax increase can be rescinded for the taxpayers. Unfortunately, I believe it will lead to more spending. 4) Mr. Finch says that housing starts went down to zero and there was no new housing construction. According to the US Census Bureau, Twinsburg has issued new residential housing permits every year from 2008-2011. And I have seen the homes being built in 2012. So, the pace of construction may not be what it was in years past, but don't mislead by using inaccurate statistics to make your point. I believe the city is trying to make everyone believe things are still as bleak as they were in the past so they can continue to collect the additional tax revenue and keep spending. They did a good job weathering the storm, but it is now time to give the taxpayers their money back!
james August 27, 2012 at 02:22 PM
Perfectly stated Dave. That's why I was against the intial increase of local income tax in the first place. Once you give government more money, they will NEWER give it back! I understand that losing Chrysler was a big hit; and its too bad for the city that we did not have Ford or GM which are making comebacks. But based on the way the auto industry and Chrysler especially was going, the city should have had more foresight in planning the possibility of its exit. Cost cutting should have started years ago, but thats the problem with goverments in general. Never saving for a rainy day.
Karen August 27, 2012 at 03:04 PM
The information provided in this article is incorrect and needs to be correct immediately!!! The City is not down by $5ML. The City is fairing quite well --thanks to the much needed quarter % income tax that many residents of Twinsburg passed in November 2009 An amendment to this story is needed asap. Which I will seek. Yes, I do see and understand perfectly why this article would be confusing because it is inaccurate.
Mitch Cooper August 27, 2012 at 03:43 PM
I just want to clarify that there were several inaccuracies in this report. I have talked with Finance Director Karen Howse and these issues have been cleared up. It should also be noted that the effects of Chrysler's departure were not really felt until 2011, and not mid-year 2010. I apologize for these mistakes and have made the necessary changes. Thank you.
Karen August 27, 2012 at 03:46 PM
Thank you Mitch!!!!
The Truth August 27, 2012 at 04:36 PM
Bottom Line = The city of Twinsburg has a whole lot more money than they thought they would have at this point in 2012!! and revenues are continuing to climb to new record heights.

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