Can Cincinnati proceed to tax the earnings of distant staff?

CINCINNATI – The city’s budget is finally balanced, but it took US $ 67 million from the US rescue plan to make it happen. On Thursday, at the first public hearing on Cincinnati’s 2022 budget, groups advocated receiving part of the balance.

However, council members are still unsure about the city’s financial future. Decisions in Columbus could radically change Cincinnati’s plans.

The subject: “In the short term, there is considerable uncertainty about the level of income taxes,” said Deputy City Director Chris Bingham.

Income tax, which funds much of the Cincinnati city budget, can usually only be levied on people who work in the city limits.

During the pandemic, Governor Mike DeWine signed an order allowing Ohio cities to collect taxes from people who work remotely for local businesses while they live elsewhere.

CONNECTED: Remote workers want to stop paying income taxes in the city

However, this measure is not permanent. And if people do not return to work in person within the city limits, the tax revenue they generated for local government will be lost.

Worst from a local government perspective, the Ohio House and Senate are considering bills that would require cities to reimburse the teleworkers who paid income tax during the pandemic.

“It would be utterly devastating for a city like Cincinnati, which is so dependent on income taxes,” said councilor David Mann, chairman of the council’s budget and finance committee.

But Cincinnati would also have time to plan. Mann said he and his colleagues are willing to use the American Rescue Plan money this year and next, if necessary, to help fill the tax gap.

“It’s not like the money goes away the next day,” when a new bill is passed, Mann said. “When we made estimates about the use of the stimulus money, we increased our contingency due to these problems, among other things.”

The city’s budget must be finalized and approved by the end of June.