By Timothy Cox
ROCKFORD -- Village officials remain concerned that income taxes from contractors working at the Parkway Local Schools construction site are not being fully collected.
There are 47 contractors and subcontractors doing some type of work at the site of the new K-12 building that is to open in about 14 months.
The building looks largely completed based on outside appearance, which led village officials to wonder why most of the estimated $160,000 in income tax revenue has not been collected. Only $22,000 has been brought in this year, and even less was collected last year. That means the town has collected less than 25 percent of the anticipated revenue.
Village Administrator Jeff Long and Tax Administrator Herb Muhlenkamp have taken steps to more closely track the issue in recent months, but those efforts have not paid off with higher tax revenue.
Some village council members estimated that the project is nearly three-fourths complete and wondered why a proportional amount of taxes have not been collected. Muhlenkamp urged caution, noting that even though the building looks like it is nearing completion, the project is only about halfway done based on the timeline for the work.
Parkway school district Treasurer Tammy Muhlenkamp confirmed this morning that based on expenditures, the project is just over halfway completed, which means significantly more tax money could stream in in the months ahead. So far, $18.7 million of the total $36 million building fund has been spent, Muhlenkamp said. She could not provide an exact breakdown on how much of that $18.7 million is labor and how much is materials.
After village officials had their first discussion on the tax matter, Tammy Muhlenkamp said the issue was addressed by district officials at a construction meeting. Contractors were told to pass pertinent tax information along to their subcontractors so taxes can properly be collected, she said.
Rockford has a 1 percent income tax collected on people working inside the village. The labor portion of the Parkway project is about $16 million, which means the village should collect about $160,000 in income taxes. Taxes are not collected on engineering and other planning work that was not done on-site in Rockford.
The $160,000 is important to village officials, because the town paid about $195,000 for a sewer line extension to the school site off state Route 118 on the south edge of town. The tax money is necessary to recoup that investment. Village officials also have discussed the necessity of installing sidewalks to the new school before it opens in the fall of 2006.