Improvements in the tax collection process during the past three years has given the city nearly $1 million in added revenue without a tax hike, Butler officials said.

City treasurer Jeff Smith told city council last week that the city earned about $950,000 more in the past three years than it would have made had it stayed at 2011’s collection rate. To get that same amount of money through property taxes, the city would have had to bump up taxes by 5 mills for those three years.

Changes in state law contributed largely to the increase in collections, while new policies at the local level also contributed.

“With the city’s expenses continuing to rise, it has been very fortunate it has been able to bring in more revenue to avoid tax increases,” Smith said.

Smith’s figures excluded the city’s debt service tax, which dropped from 9 mills in 2011 to 6.25 mills the past three years. That tax was increased by city council in December to 7.5 mills for 2015. The budget this year is $8.3 million.

Smith said the city is earning more than $300,000 more per year in tax revenue than it did in 2011, adding total tax collection has increased each of the past three years.

Earned income taxes have increased the most of all the taxes, although they had a slight dip in 2014 from the 2013 figures.

Smith said the earned income tax collections have increased as a result of Act 32, which mandated a countywide tax collection service beginning in 2012.

Earned income tax revenue for the city has increased from $759,000 in 2011 to $975,000 in 2014.

The city has brought in an additional $640,000 more in earned income taxes than it would have had it stayed at the 2011 level.

But the city has also worked to increase its revenues in other taxes not affected by the change in state law.

“At a more local level, I think the biggest change was in the business privilege tax,” Smith said.

Smith said revenues from the tax increased from $1.28 million in 2011 to $1.44 million in 2014, totaling more than $250,000 in additional revenue during the three years.

The increases came despite a new tax abatement program council approved in 2012 that gave all new businesses in the city two years of no business taxes.

“We really haven’t seen the tax revenue from new business during that time,” Smith said.

Driving the business privilege collection increase may have been an increased focus on landlord’s tenant registration, Smith said.

The city in 2013 began mandating all landlords report a list of tenants to the treasurer’s office at the beginning of the year.

Smith said the tenant registration process allows the city to better collect on the business privilege taxes from landlords as well as per capita taxes.

City code dictates landlords must pay the 7-mill business tax on their properties.

“I’d say before some landlords might have been missed in the tax collections,” Smith said.

About 25 percent of the tenant registration notices this year were sent out electronically, Smith said.

“Not only is the electronic method cheaper, it seems as though the response rate is higher and faster than when we mail them,” he said.

The registration process also aids in resident and per capita taxes.

The treasurer said the office’s focus on sending out courtesy notices to residents reminding them to pay taxes also has helped prevent delinquent payments.

“We’ve had many residents call in and thank us for reminding them when taxes are due,” he said.

The city’s local service tax revenue increased to $292,000 in 2014, up from $274,000 in 2011, while its real estate property taxes had a slight increase in revenue as well.

Mayor Tom Donaldson said the figures were good news for the city.

“We appreciate all the work that the treasurer’s office does,” he said at the meeting. “(Smith) and his staff always do an excellent job there.”