The city of Cincinnati's projected budget deficit for the new fiscal year that begins in July now stands at $91.4 million. The number grew by $10 million in just two weeks.
Cities like Cincinnati are vulnerable to the economic impact of the COVID-19 pandemic because of its heavy reliance on income tax revenue to strengthen its fiscal standing. According to the Brookings Institution, in 2019 "elastic" sources like income tax revenue made up nearly 72% of the city's general fund revenues.
As more locals find themselves working less - or not at all - due to the stay-at-home orders brought on by the pandemic, that hits the city right in the coffers.
A new study produced by Brookings analyzes the vulnerabilities of cities and their reliance on income or sales tax revenues, and reveals that Columbus, Cincinnati, and to a lesser degree, Lexington and Louisville, will feel the most immediate impacts.
Michael A. Pagano is a co-author of the study (with Christiana McFarland, the research director at the National League of Cities), and is also the dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago, and a professor of public administration, a fellow at the National Academy of Public Administration, and former co-editor of Urban Affairs Review. Professor Pagano joins Cincinnati Edition to talk about the study and the pandemic's potential economic impact to Cincinnati.
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