State law gives the city authority to levy taxes and charges the taxing authority (City Council) with passing a budget on or about the first day of the fiscal year.
Cincinnati’s fiscal year runs from July 1 to June 30. The fiscal year is named for the year that it ends — so fiscal year 2027 begins July 1, 2026 and ends June 30, 2027. It’s often shortened to FY26, FY27, etc., etc.
Cincinnati operates on a biennial budget covering two fiscal years at a time. However, state law requires an annual appropriation.
On “off” years, Council votes on a “budget update” to account for differences in actual revenue compared to expected revenue. Practically speaking, however, significant changes are typical in a budget update year.
Where to see detailed budget information
Documents are published on the city website: Cincinnati-oh.gov/finance/budget.
Who decides how to spend taxpayer money?
City Council has final say over spending tax dollars. Council collects public input at several stages in the process. That usually includes three public hearings in late February or early March.
Then, Council hears presentations from department directors before passing a budget priorities motion — this broadly outlines what Council wants to see included in the budget.
The city manager works with the professional administrative team to prepare the first draft of each budget.
The draft is passed along to the mayor, who has the option to make any changes before it goes to City Council. The draft and the mayor’s proposed changes are usually released at the same time in late May.
Council then has until June 30 at the latest to pass a final version; typically, Council finalizes the budget in mid-June.
Funding appropriations, including the budget, require a simple majority (five of nine votes) to pass.
However, budget ordinances are typically passed with an emergency clause so that they can go into effect immediately — that’s necessary when the budget is passed in mid-June, less than 30 days before the fiscal year begins on July 1.
The ordinance itself still only requires a simple majority, but the emergency clause requires a greater majority (six of nine votes).
Community engagement and how to weigh in
Council considers resident input when deciding budget priorities.
One source of input is a semi-annual Community Perceptions Survey, an official poll that surveys a representative sample of verified city residents. This is useful in identifying citywide sentiment on how government is operating; the people who are able to address Council at public comment (usually in the middle of the work day) do not necessarily represent the whole community.
Council also hears from residents directly at several public hearings. There are usually a few public hearings in late February or early March. After the first draft of the budget is made public in late May, Council hosts one more public hearing in early June.
Residents also can give feedback on the budget during regularly scheduled meetings of the Budget Committee (Mondays at 1 p.m.) and the full City Council (Wednesdays at 1:30 p.m.).
And residents can submit feedback in writing by emailing CityCouncil@cincinnati-oh.gov.
Operating vs. capital budget
The city effectively has two different budgets: the operating budget and the capital budget.
The operating budget pays for wages for city employees and the cost of supplies needed to deliver services provided by the city, like police officer patrols, filling potholes, trash collection and operating the water treatment system.
The operating budget includes the general fund, where City Council has the most flexibility in spending decisions. General fund dollars can be used for capital projects, but capital dollars cannot be used for operating expenses. More on that below.
The capital budget covers purchasing or improving assets like buildings and vehicles. It includes assets that cost at least $5,000 and last at least five years. The capital budget includes some cash and some borrowing.
Some city departments have a budget on both the operating and capital side.
Where city revenue comes from
City revenue primarily comes from taxes, plus a few sources of fees (like for public parking and permit applications) and fines (like for building code violations and impounded vehicles).
The largest single-source of city revenue for the general fund is income taxes, also called earnings taxes.
As an example, here’s a breakdown of projected general fund revenue for fiscal year 2027:
- Earnings tax: 63.6%
- Property tax: 8.1%
- State shared revenue: 2.7%
- Casino tax: 1.7%
- Investments: 4.7%
- Parking meters: 0.2%
- Other revenues: 19%*
*Includes: license and permit fees; admission taxes; short-term rental excise taxes; buildings and inspections fees and permits, etc.
All city residents over age 18 pay a percentage of their taxable income to the city; people who live elsewhere but work in Cincinnati also pay that income tax.
Anyone can get up to 1.8% credit for income tax paid to another locality, like if they live in Cincinnati but work outside the city and pay income tax to the city they work in.
The current city income tax is 1.8% of gross earnings and the revenue is divided into three categories:
- 1.55% to the general fund in the operating budget
- 0.15% to the capital budget for permanent improvements
- 0.1% for maintenance of city infrastructure (operating budget). This portion goes into special revenue funds in the operating budget to maintain and repair infrastructure, but can be used for certain capital uses.
Operating budget + the general fund
Most of the operating budget — about 81% — goes toward personnel, paying salaries and benefits for city employees.
Most city employees — nearly 84% — are part of a union that negotiates with the city administration for multi-year contracts, which include annual wage increases. City Council votes on whether to approve negotiated agreements.
Most of the general fund goes toward public safety: the police department accounts for about 35%, while the fire department makes up about 27%.
Public safety also generates some revenue for the city. This revenue comes from both police and fire departments, including from emergency transport services, impounded vehicle fees, police detail charges, fire inspection fees, false alarm fees and police auction proceeds.
Restricted funds
The city has many restricted funds, which means the revenue that comes into that fund can only be spent for a specific purpose.
One restricted fund is the Health District Fund, which is separate from the city’s general fund in order to comply with Ohio state law. A bit of revenue goes into that fund from fees paid for birth and death certificates, but it’s primarily funded from the general fund. This is represented in budget documents as a “transfer out” — once money has been moved into the Health District Fund, it cannot be moved back to the general fund.
Some restricted funds also are called enterprise funds, which means the revenue that goes into the fund is generated by providing some kind of service.
One example is municipal golf; the city owns six golf courses, which are operated and maintained using revenue from green fees and event space fees. That fee revenue cannot be used to support other city services.
A much larger example is Greater Cincinnati Water Works, the drinking water utility. Revenue comes not from taxes, but from the utility rates each customer pays — and not all customers are city residents. City Council has to approve the utility rates. That revenue can only be spent to continue providing the service, which includes maintaining the physical infrastructure (capital projects) to do that. Utility revenue cannot be moved to other parts of the city budget.
Another major utility, the Metropolitan Sewer District of Greater Cincinnati (sanitary sewer utility) is a unique example, because the city of Cincinnati shares jurisdiction with Hamilton County. The Hamilton County Board of Commissioners approves the MSDGC budget each calendar year, including the utility rates. You can learn more about that complicated relationship in WVXU's Backed Up podcast.
Human services and leveraged support
The city has several grant programs for nonprofit organizations and small businesses doing work in the community, like the Boots on the Ground Fund, Safe and Clean, and grants through the Green Cincinnati Plan for sustainability work. These grant programs operate on a variety of award schedules throughout the year.
Within the annual budget, there are a few mechanisms for the city to allocate operating support funding for outside organizations or companies.
Human Services Fund
The primary program is the Human Services Fund. It equals at least 1.5% of the general fund each year. For fiscal year 2027, that’s about $10.2 million.
The Human Services Fund is administered by the United Way; organizations submit an application for a specific project or program that fits within priority categories set forth by City Council. Grants are awarded every two years as part of the city’s biennial budget process.
The Human Services Advisory Committee, or HSAC, reviews all applications and decides which ones to fund; their recommendations go to Council for a final vote.
The categories for the Human Services Fund are:
- Youth gun violence prevention and reduction (up to 26%)
- Comprehensive workforce development (up to 26%)
- Supporting, securing and stabilizing housing for high-risk populations (up to 26%)
- Project LIFT (emergency wraparound services; 10%)
- Overhead (10%)
The city also can grant an “Impact Award” with up to 10% of the fund for a single project.
Leveraged support
These are grants intended to help organizations “leverage” other funding sources to amplify their impact.
Organizations apply for a grant directly to the city administration, which makes funding recommendations to City Council for ultimate approval.
Grants are awarded in the categories of arts, environment, and equity and inclusion. Applicants must be an existing organization and must offer a service that directly benefits city residents. Awards are granted between $50,000 and $500,000, with an award above that ceiling only in “extraordinary circumstances.”
Organizations cannot get funding from both the Human Services Fund and Leveraged Support for the same program.
Programmatic support
The city provides funding to some third parties under a “fee for service” model; each one has a contract that defines what services they will provide.
Examples include 3CDC, which gets annual funding to operate and manage Fountain Square, Washington Park and Ziegler Park; Keep Cincinnati Beautiful, which helps the city manager litter pickup; a needle exchange program; and Women Helping Women’s Domestic Violence Enhanced Response Team.
Capital budget
As explained above, the capital budget covers purchasing or improving assets like buildings and vehicles. It includes assets that cost at least $5,000 and last at least five years. The capital budget includes some cash and some borrowing.
Capital dollars cannot be moved to the operating budget.
The city can take on debt for capital projects, but the amount of debt is limited by the amount of revenue expected from taxes — the city has to bring in enough money to make payments on the debt.
Other revenue sources include state and federal grants, and earned interest resulting from the sale of a city-owned railway.
Cincinnati Southern Railway
A large and growing source of revenue for the capital budget comes from sale of the Cincinnati Southern Railway, which the city built in the late 1800s. The city never operated the railroad itself; it’s always been leased to a private company. A subsidiary of Norfolk Southern leased the railway from 1881 until the sale.
In 2023, Cincinnati voters approved the sale of the railway to Norfolk Southern for $1.6 billion. The revenue was invested, with a portion of earned interest staying in the fund to grow the principal, and another portion being disbursed to the city for the capital budget — with strict rules for spending (see below).
The investment trust fund is overseen by an independent board of trustees, whose members are appointed by the mayor. The Cincinnati Southern Railway Trust Board works with a professional firm to manage the investments; the board also decides how much money to send the city each fiscal year.
You can learn more about the Cincinnati Southern Railway Trust and see information like meeting minutes and fund updates on their website: thecsrt.org.
City Council decides how to spend the revenue, within the strict limitations of state law.
Generally speaking, the money can be spent to maintain or replace existing city-owned infrastructure — things like roads, bridges, police and fire stations, health centers, city parks, etc.
The city’s Cincy on Track public dashboard shows specific projects approved for railway spending, as well as the city’s progress in spending the money.
A portion of the fund also can be spent on administering the trust; that means paying fees to investment managers, operating a website to publish documentation, etc. Members of the Board of Trustees are not paid.
Why does City Council sometimes spend money in the middle of a fiscal year?
The regular fiscal year budget is passed annually in June. But you might see headlines about Council approving funds at other times of year, outside the usual budget process.
One time that happens is during the carryover budget. At the end of each fiscal year, there’s typically money leftover because the city under-estimated incoming revenue or over-estimated expenses, or both.
Council policy dictates where most of the leftover money should go in a process called the “waterfall.”
Most of it is split by percentages to go into a series of reserve accounts, which grow over time and are saved for various “rainy day” scenarios — like a natural disaster, economic downturn, or more mundane unexpected expenses during the fiscal year. Council will sometimes spend from one of these reserve accounts.
At the bottom of the “waterfall” are a few buckets that get a little annual boost in revenue if there’s any carryover left. Those include up to $2 million to the pension fund for retired city workers, and up to $5 million to the Affordable Housing Leverage Fund.
Sometimes Council approves spending mid-year because a project came in under budget, freeing up resources to be spent elsewhere.
What city taxes DO NOT fund
There are a couple notable public services that are not included here: public schools and public libraries. That’s because in Cincinnati, those entities are entirely separate from city government.
Cincinnati Public Schools gets revenue from local property taxes, as well as the state and federal government. CPS is governed by a seven-member elected Board of Education.
The Cincinnati and Hamilton County Public Library is funded by the state of Ohio and county-wide property tax levies. CHPL is governed by a seven-member Board of Trustees — four are appointed by Hamilton County Commissioners, and three are appointed by the Hamilton County Court of Common Pleas.
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