The State of Ohio received over $5 billion in American Rescue Plan funding. To date, the state has created grant programs that pass over $1 billion of that funding directly to local governments, supporting state and local partnerships in public safety, economic development, and infrastructure. 

For example, the Ohio Department of Development brownfield remediation and demolition programs will award $350 million to cities and other local government entities to spur development of former industrial sites across the state.

The State of Ohio has also dedicated $250 million of its ARP funds to law enforcement and local governments to implement violence reduction and other public safety programs. 

Additionally, Ohio has announced that it will triple the minimum federal funding available to local governments for local bridge repair projects through the Infrastructure Investment and Jobs Act (IIJA, the bipartisan infrastructure law enacted in 2021). This infusion of federal funds will help cities begin to make needed repairs to the thousands of Ohio bridges that are structurally deficient.

After the passage of the American Rescue Plan in spring 2021, the Ohio Mayors Alliance advocated early and often for the State of Ohio to pass through some of its ARP funds directly to local governments, and although the State did not directly grant additional money to cities, we believe that these grant programs are a direct result of our and others’ advocacy to ensure federal funds fill as many local needs as possible.

A spreadsheet of Ohio grant programs that allocate federal dollars to cities is available here, and will be updated periodically.

The primary revenue source for nearly all Ohio cities is a local municipal income tax. Ohio is unique among states in this regard —the vast majority of U.S. states’ local tax structures rely significantly less on local income taxes to provide revenue for essential city services. Ohio’s municipal income tax is applied to both residents and non-resident commuters – individuals that work in one city but live in another. For many Ohio cities, a significant share of income tax revenue comes from these non-resident commuters. This issue is amplified in some large, land-locked Ohio cities like Cleveland and Cincinnati that have a particularly high percentage of workers who live outside the city. Additionally, many Ohio cities continue to struggle against the impacts of long-standing and deeply entrenched high rates of segregation, poverty, and inequity. For more information on this issue, see this report OMA published in October 2021.

In Cleveland, Cincinnati, and Dayton, for example, between 76 and 81 percent of the taxable workforce lives outside the city. If a large share of workers no longer commute into the city, and instead work from home in a different community, Ohio cities will face significant and ongoing revenue loss over the next decade and beyond. Our research shows that OMA member cities, on average, receive almost two thirds, or over 60 percent, of their revenue from income taxes. And contrary to what many state policy makers believe, cities do not spend their revenue on unnecessary “frills:” they spend most of their revenue on first responders and essential city government services like street maintenance.

The loss of a significant percentage of municipal income tax revenue is not something cities can simply “absorb” or work around. Ongoing revenue loss would mean cuts to crucial city services like police and fire departments. It would also mean far less funding for youth and senior programming, parks and recreational facilities and activities, and development incentives that create and maintain many of the jobs that are fueling the remote work tax issue. 

This problem requires a long-term solution, and finding and advocating for that solution is something the Ohio Mayors Alliance is deeply committed to over the next couple of years. In the meantime, however, Ohio cities are relying heavily on the budget stabilization funds the American Rescue Plan has made available to them to maintain necessary investments in public safety and other basic city services. In Columbus, for example, ARP funds have made it possible to move ahead with hiring needed first responders despite potential looming revenue losses. In our 2021 ARP Report, OMA detailed over $371 million in potential lost revenue in our cities as a result of the COVID pandemic. We will know much more about the impacts of the pandemic and remote work on city budgets in the coming years. ARP funds give our cities some time—until the end of 2024—to analyze this issue further and develop potential solutions that protect Ohio cities’ fiscal health. 

The City of Cincinnati gained a national spotlight in February 2022 when the Cincinnati Bengals traveled to Los Angeles to compete in Super Bowl LVI. In the wake of the country learning the origins of “Who Dey” and Mayor Aftab Pureval and Cincinnati residents and natives all over the country hyping up the city at every opportunity, we thought we would take the time to spotlight the ways Cincinnati is making use of historic federal funding opportunities and strategizing about its future in the wake of the COVID-19 pandemic.

Cincinnati owns the distinction of being the first Ohio city to allocate its American Rescue Plan Act (ARPA) funds shortly after the law was enacted in March 2021. By May 2021, Cincinnati had funded affordable housing and arts programs in the city, and dedicated significant money toward small business support, tourism, public museums, and neighborhoods. 

Mayor Pureval has hit the ground running since taking office in January 2022, with plans to develop new affordable and mixed-income housing as well as tackle gun violence, racial equity, and poverty. In the run-up to the Super Bowl, Mayor Pureval noted in this NPR interview that Cincinnati is building the largest city-run solar farm in the country and has unprecedented opportunities to do big things in the coming years. Shortly after the Super Bowl, Mayor Pureval announced that the city would allocate $5 million from its ARPA funds to Cincinnati’s Affordable Housing Trust Fund. This funding is being enhanced by an additional $15 million in private funding.

In April, Cincinnati City Council and Mayor Pureval announced plans to use leftover ARP funds from 2021 to invest in summer public safety and improve bike safety and help residents purchase homes.

Cincinnati will receive just over $279 million in ARPA funds, divided between 2021 and 2022, and has been able to maintain critical public services by allocating over $100 million to budget stabilization in 2021, in addition to its investments in businesses, residents, and cultural and neighborhood institutions that make Cincinnati unique. We look forward to seeing what big things Cincinnati does in 2022 and 2023.

To read more about how Cincinnati and 27 other Ohio Mayors Alliance cities are thinking about spending ARP funds, read our January 2022 ARPA report here.