This weeks #GOPCThread returns to an issue we first addressed last fall, and provides an update on the potential impact of changing Ohio’s municipal income tax laws on smaller Ohio cities.
Not on Twitter, the thread is available online , as well as below.
Greater Ohio Policy Center Read on Twitter
Today’s #GOPCThread returns to an issue we covered in the fall: what will happen if Ohio’s emergency municipal income tax provisions are repealed. This time it’s the 🚨 Small Cities Edition 🚨
Analyzing the Impacts of Repealing Emergency Municipal Income Tax Provisions | Greater Ohio Policy Center (click image for link)
Spoiler alert: things look almost as grim for #Ohio’s small cities as it does for our big cities. #GOPCThread
As a refresher: In 2020, @GovMikeDewine & legislators passed an emergency COVID law allowing cities where employers are located to continue to collect taxes from employees, even if workers are working in their homes in a different jurisdiction. #GOPCThread
Should You Pay Commuter Taxes While Working From Home? | Columbus Dispatch (click image for link)
In the fall we concluded that Ohio’s 6 biggest cities could lose $306M/year if the emergency remote worker law was repealed or struck down by the courts #GOPCThread
For the Small Cities edition, we reviewed municipal income tax collections among 316 cities and villages in the state. What we found was that the vast majority of these cities would see financial losses if the emergency measure is eliminated. #GOPCThread
Based on commuting patterns alone, 10 of Ohio’s 16 #ReinventionCities (aka small #legacycities) can anticipate a loss in muni income tax revenue #GOPCThread
The 6 cities that could potentially anticipate an increase in muni income tax revenue would likely seen incredibly modest gains. #GOPCThread
We know that additional factors will further reduce any income cities might expect to receive from WFH residents. Ex: incomes of in-city residents are not the same for commuters; income tax credits will likely reduce in-city gains. #GOPCThread
We also looked at hard data from @ritaohio, which collects muni income tax data from 350+ municipalities & joint economic development districts in Ohio. Using actual tax collection data from previous years they calculated likely impacts of repealing the emergency law #GOPCThread
@RITAOhio analyzed what would happen to municipalities’ finances if 10%, 20% and 30% of employees worked remotely. Under all 3 scenarios, RITA forecasted 85% of the cities/villages they serve will experience a reduction in revenue #GOPCThread
If 30% of workers work remotely, @RITAOhio’s clients could lose, on the aggregate, $105M/year. #GOPCThread
Only a few of @RITAOhio’s client municipalities would actually gain enough revenue from their WFH residents to hire another city staffer (22 of 300 cities). Like the #ReinventionCities, most RITA clients would see modest gains from residents who are working at home #GOPCThread
And for the record: our analysis of Ohio’s “Big 6” & #ReinventionCities, and @RITAOhio’s analysis of their 300 client municipalities confirms that one city’s municipal income loss rarely translates to another city’s clear gain. #GOPCThread
Nearly a dozen witnesses, including @OhioMayors, #OhioMunicipalLeague have testified to Ohio legislators that changing the emergency remote worker law right now would debilitate our communities and thus the state. #GOPCThread
House Ways & Means Committee | March 10, 2021 (click image for link)
The data and testimony are clear: rolling back this emergency clause will cause major disruptions and undercut the heart of Ohio’s economic competitiveness. #GOPCThread
