Large YS employers holding steady
- Published: March 19, 2009
RECESSION IN THE VILLAGE
This is the third in a series of articles looking at how the unstable economy is affecting various aspects of Yellow Springs life, including businesses, nonprofits, the arts, housing and schools.
While the turbulent economic climate has affected all regions of the country, some municipalities are faring better than others. So far, Yellow Springs seems to be one of the relatively fortunate towns, as most of the largest employers in Yellow Springs report overall stability, even as they face the coming year with caution.
Yellow Springs seems to be weathering the downturn partly because the majority of top employers are in the relatively recession-proof professions of education and health care, along with, in the case of YSI Incorporated, the growing field of environmental sustainability.
“Our top five employers are fairly strong,” Village Manager Mark Cundiff said in an interview last week. “For a little village, we’re doing okay.”
In a listing of the Village’s top 25 contributors of income tax in 2008 prepared by the Regional Income Tax Agency, or RITA, the top six employers were Antioch University, YSI Incorporated, The Antioch Company, the Yellow Springs school district, the Greene County Board of Education and Friends Health Care Association.
Many Ohio municipalities, especially those with a large manufacturing base, experienced a decrease in income tax receipts in 2008, according to Christie Price, CFO of RITA, which provides income tax services to more than 100 municipalities statewide. But some communities are holding their own, Price said, stating that because Ohio didn’t prosper as much as some states during the housing boom, the state hasn’t suffered as big a decline during the recession.
YS revenues up
Income tax withholding and net profit revenues to the Village from the town’s largest employers were up in 2008, the third year in a row that income tax revenues increased.
Income tax distributions make up 40 percent of the Village’s general fund, according to Village Finance Director Sharon Potter last week. The general fund provides revenue for most Village operations that are not utility-related.
The Village received $881,777 in income tax from the large employers in 2008, $832,476 in 2007 and $786,376 in 2006, according to RITA documents. The 2008 income tax revenues reflect a $49,300 increase over the previous year.
And in the most recent income tax revenues, those from January 2009, income from the Village’s top 25 employers increased by $14,088, from $73,781 in 2008 to $87,870, according to the RITA document.
Income tax withholding revenues from two of the top five employers, Antioch University and The Antioch Company, dropped in 2008. But those losses were balanced by increases from other sources, according to the RITA statement. These include a significant YSI increase, increased revenues from the Yellow Springs school district, new income tax revenues from two individuals, and a first-time payment of $7,071 from the College Revival Fund, which funds the Nonstop Liberal Arts Institute.
In estimating income tax revenues for the 2009 general fund budget, Cundiff and Potter projected that the Village’s income tax revenues would drop by about $55,000 this year. That estimate may be overstated, according to Cundiff, who said that he took into account the regional impact of the recent General Motors shutdown in Dayton as well as the closing of DHL in Wilmington. It’s important to be conservative when estimating tax revenues, Cundiff said, although he hopes to be proven wrong.
Effects of college closing
The economic effects to Yellow Springs of the closing last June of Antioch College are still unclear. Currently, Antioch University remains the town’s largest source of income tax withholding, and January 2009 income tax revenues were larger than those of 2008.
However, according to Price of RITA, timing plays an important role in income tax distribution. A month’s tax revenues may not present an accurate picture of the institution’s financial state, she said, since companies may file at various times during the year.
The university continues to employ 68 employees in Yellow Springs, not counting McGregor, according to figures supplied by Antioch University Director of Public Relations Lynda Sirk. That number includes 33 administrators, eight administrative assistants, 10 union staff, eight non-union staff, four core faculty and five adjunct faculty. At McGregor, the university employs 19 faculty, 13 administrators, 13.5 union staff and 125 adjuncts.
Overall in 2008, the university’s income tax payments to the Village did go down, apparently reflecting the closure of the college in 2008, when about 100 employees were let go. That decrease continued a several-year downward spiral in university income tax revenues to the Village. According to RITA documents provided by Potter, in 2006 Antioch University paid the Village $203,466 in tax income, in 2007 $193,148 and in 2008 $159,240.
However, the full impact of the college closure on the local economy won’t be clear until 2009, Potter said, since last year the university continued to pay college employees through June, and faculty and some staff received severance pay for several months longer.
However, some of the loss of Antioch College income tax revenue was made up by income tax from Nonstop, funded by the college alumni association’s College Revival Fund. That organization currently employs about 34 people, according to CRF head Risa Grimes last week, including the faculty and staff of the Nonstop Liberal Arts Institute and staff for the CRF. However, the future of Nonstop after June 2009 is not clear, and is linked to the current effort to revive the college.
YSI prospers, but cautious
YSI Incorporated, the village’s second largest employer, last year enjoyed increased profit over the previous year, as well as its sixth straight year of increased stock value, according to CEO Rick Omlor. In 2008 the business added 10 new jobs to its staff of 150, its fifth straight year of increased employment, according to a statement from Omlor, who stated that several positions are still open.
Leaders of YSI feel that the growing worldwide concern about global warming and environmental sustainability bodes well for the company’s future, Omlor said recently.
“We can attribute our success to our dedicated employees, our strong balance sheet and our strategic focus — providing tools for the measurement of water quality and quantity in the natural resources market,” Omlor said last week.
YSI’s income tax withholding payments to the Village reflected its growth. Tax payments increased by $33,246 last year, from $119,941 in 2007 to $153,188 in 2008. In January 2009, the latest tax information available, the company’s tax payments to the Village increased by $6,895 over January 2008, according to a statement from RITA.
However, company leaders understand that they are not immune to the economic slowdown, and the company’s growth slowed some at the end of 2008, Omlor said.
“For now, we are investing and building the business as planned, but are ready to make adjustments if needed,” Omlor wrote in a statement this week.
In January 2009 The Antioch Company dropped from being the third largest Village income tax producer to the seventh largest. The drop indicates that 2008 was a difficult year for the longtime Yellow Springs company; in November it entered into a prepackaged bankruptcy process. The company emerged from Chapter 11 in January and is now focused on the manufacture of materials and tools for digital scrapbook materials for its largest subsidiary, Creative Memories, according to Chandra Attiken, the company’s vice president for human resources.
While the company has moved its administrative offices to its headquarters in St. Cloud, Minn., it remains committed to keeping 60 production employees in Yellow Springs, Attiken said. Those employees will remain in Yellow Springs because they are skilled pressmen who produce the paper products for Creative Memories, and it would be against the company’s interest to let these skilled workers go, she said.
However, in 2008, the Yellow Springs location let go of about half of its employees, so that its numbers have dropped to 60 from 120. Part of that decline reflects the sale last year of Antioch Publishing, the oldest section of the business.
In 2008, The Antioch Company paid $82,706 in employee income tax withholding, a drop of $8,963 from 2007, according to the RITA document. In January 2009, income tax revenues from the company were $2,982, a $6,342 drop from January 2008.
Creative Memories is active in eight world markets, and continues to have 48,000 consultants wordwide selling its scrapbooks, Attiken said.
New jobs at schools
In 2008 Yellow Springs schools enjoyed modest growth with about 30 new students, including both local and open enrollment students. This increase led to the school system hiring 2.5 new employees, according to District Treasurer Joy Kitzmiller last week. That increase and step increases in salaries led to the schools paying the Village $67,119 in income tax withholding last year, an increase of $6,293 dollars over 2007.
Overall, the school district currently employs 86 full and part-time employees, and there are no plans to eliminate jobs this year, according to Kitzmiller, who said that while the schools are attempting belt-tightening measures, those measures are small ones, such as eliminating some school field trips.
The Greene County School Board was the village’s fifth largest employer in 2008, according to the RITA document. The school board employs about 50 to 60 teachers, administrators, aides and staff members at the Greene County Educational Service Center in Yellow Springs, according to Superintendent Terry Thomas in an interview last week.
In 2008 the Greene County board paid the Village $49,314 in income tax, a $1,500 increase over 2007. The board does not anticipate any job cuts this year, Thomas said.
“So far we’ve been weathering the economy,” he said. “The last few years we’ve been holding steady.”
The Yellow Springs site holds the county program for emotionally disturbed children, and the numbers of children with special needs has increased in recent years, according to Thomas, who said that the program’s services are dictated by the needs of students.
Some cuts at FCC
In 2008, the Friends Health Care Association was the Village’s sixth largest employer, with about 125 employees, including 88 fulltime. The total 2008 income tax withholding revenues from FHCA to the Village were $41,669, a drop of $229 from 2007, according to the RITA document. In the monthly RITA report for January 2009, the organization was listed as the fourth largest income tax payer, with a payment of $4,739, a $1,481 increase over the same period last year.
Overall, according to executive director Karl Zalar last week, the economy is having little effect on the facility.
Friends Care was filled to 96 percent capacity the first two months of 2009, although four beds are currently open, according to Zalar, who said he sees these openings as temporary.
The organization did recently cut 2.5 positions from its activities staff due to budget difficulties, although he has no plans to cut more staff, Zalar said.
“We feel we’re reaching a point where it would be difficult to further reduce positions,” he said.
While the economy has little effect on the organization, it is facing financial challenges, Zalar said. Those challenges are linked to the fact that Medicaid payments have not increased in five years, during which time costs have increased. Because several residents have lived in the long-term care facility for several years as private-pay residents and have now exhausted their savings, the facility is more dependent than in the past on Medicaid, according to Zalar.
Due to these budget difficulties, the organization has recently stopped paying for employees’ meals, a move that will save $26,000 this year, Zalar said.
*The News will address smaller local companies in an upcoming article in this series.