An income tax increase may not be on the Cincinnati ballot this year after all.
In January, Mayor Aftab Pureval announced plans to ask voters for an increase in 2026. Pureval says a lot has changed since then.
"I wasn't anticipating in January, that we would engage in this reckless war in Iran, which is having a really negative impact on our energy costs but also downstream on our food costs," Pureval told WVXU. "It's a tough economic situation, with rising energy costs, with mortgage rates going up, with interest rates staying high. That's a heavy burden for our residents."
In other words, cost-burdened Cincinnatians may be less likely to support a tax increase.
"But at the same time, this could be a strategy to insulate us — by relying on our own resources — from the whims of the federal and state government," Pureval said.
Pureval says he’s working with City Council members to reach a consensus on when to go to the ballot, how much of an increase the city should ask for, and how the city would spend the new revenue.
But on one thing, Pureval is confident: "Our expenses are outgrowing our revenues," he said. "At some point, we have to raise revenues."
The deadline is already passed for the May primary ballot.
The current earnings tax in Cincinnati is 1.8% of gross earnings. The revenue is divided into three categories:
- 1.55% for the general fund
- 0.15% for permanent improvements (the capital budget)
- 0.1% for maintenance of city infrastructure (the capital budget)
A few years ago, the mayor appointed a panel of business and community leaders to evaluate the city's financial health and recommend action. The Futures Commission report, released nearly two years ago, included recommendations for two income tax increases:
- 0.1% increase for economic development
- 0.05% increase for public safety
The police and fire departments already make up 61% of the city's general fund. The police budget has increased 42% over the last 10 years, and the fire budget has increased 62%, compared to a general fund increase of 51% during that time.
Pureval has said the Futures Commission recommendation is the beginning of the conversation, not necessarily the blueprint for moving forward.
City Council is in the middle of considerations for the next fiscal year budget, which will begin July 1. City administration is estimating a $29.5 million deficit in the general fund. Departments have been asked to estimate a 5.1% cut.
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