Cincinnati Reserves $50M For Remote Worker Tax Refunds
Update, September 22: Council voted unanimously to approve the City Manager's recommendations for spending carryover funds.
The majority of Cincinnati's roughly $70 million carryover from the last fiscal year will be put in reserve. City administration is recommending about $50 million be set aside to pay for expected income tax returns.
Finance Director Karen Alder says many Cincinnati companies have let employees work from home, and non-city residents will be able to ask for a refund.
"We've really looked hard to try to come to a good number that is a responsible number so that come spring, we're not in a position to have to cut the budget because we can't meet the refund liability," Alder told the Budget and Finance Committee Monday.
City officials won't know the full extent of refund requests until the tax filing deadline next spring.
Interim Council Member Steve Goodin says this could become a yearly problem.
"What that means for this city and its operating revenue going forward — if this remote working is to continue, if the state legislature is going to continue forcing us to refund it at this rate, if folks learn through their accountants they have this option — it is going to be potentially devastating to us."
Another roughly $18 million from carryover will be set aside as part of the regular budget reserve, following policies set by council over the past several years:
- General fund carryover balance: 1.5% of operating revenue ($7.2 million)
- General fund contingency account: $4.4 million
- Economic downturn reserve: $3.2 million
- Working capital reserve: $3.1 million
City Manager Paula Boggs Muething has a recommended plan for spending the $3.1 million left for one-time uses:
- Human resources sworn testing: $45,237
- Parks mower and other maintenance equipment: $22,000
- Records management software for police and law: $85,000
- Assorted capital projects shifted to operating budget: $251,600*
- DCED Capital projects shifted to operating budget: $273,400*
- King Records (using starred sources above): $525,000
- King Records (using carryover funds): $475,000
- Chamber of Commerce Immigration Center partnership: $50,000
- Central Parkway Streetscape: $1,000,000
- Safe and Clean neighborhood fund: $250,000
- Manager's Advisory Group youth violence reduction initiative: $200,000
- HR centralization initiative: $102,500
- Cincinnati Contemporary Arts Center Renovations: $100,000
- Equitas Health mobile outreach vehicle: $100,000
- Cincinnati Citizens Respect Our Witnesses (CCROW): $208,000
Note: see a full report with explanations for each project at the end of this story.
Not in the recommendations is $2.25 million for a new Boys and Girls Club in Roll Hill. Council Member Jan-Michele Lemon Kearney and interim member Liz Keating filed a motion requesting carryover funds for that project, which seems to have support from others on council.
Budget and Finance Chair David Mann asked city administration to look for ways to incorporate the Boys and Girls club into a revised spending plan.
Greg Landsman's "Safe and Clean" fund is allocated $250,000 under the city manager's plan, which is half of what Landsman requested for that purpose.
The city manager's plan also doesn't include the $500,000 council requested for the First Lutheran Church bell tower restoration project. That 8-1 vote in June came before the church leadership's most recent decision to move forward with demolition. Council members did not mention the bell tower during Monday's discussion.
Council is expected to vote on carryover funds within two weeks.