BIPARTISAN MAYORS’ GROUP OUTLINES CONCERNS OVER BUDGET PROVISION

June 3, 2021

BIPARTISAN MAYORS’ GROUP OUTLINES CONCERNS OVER BUDGET PROVISION

Retroactive changes to remote working during pandemic will cost cities, threaten recovery

COLUMBUS, OH – Mayors from opposing parties came together today to raise concerns over a budget provision that could have significant impacts on many communities across Ohio.  Columbus Mayor Andrew J. Ginther, Findlay Mayor Christina Muryn, and Youngstown Mayor Jamael Tito Brown say that retroactive changes to a temporary pandemic law impacting remote working will have significant fiscal impacts on many communities and could slow Ohio’s economic recovery.

“It will be critically important that state and local leaders work together to ensure that we have a strong economic recovery from this pandemic,” said Columbus Mayor Andrew J. Ginther. “We know remote working will have an impact on municipal budgets in the years ahead, which is why mayors across the state, in communities of all sizes, are so concerned about the retroactive changes being proposed in the state budget. These changes could cost local governments millions and send our recovery into a tailspin.”

Last year, the state legislature passed a temporary provision to provide stability for employers and local governments that “treated income earned by an employee required to work at a temporary worksite because of the emergency as being earned at the employee’s principal place of work.” (LSC, Bill Analysis of Sec. 29 of HB 197). A budget amendment recently proposed would change this to only make it applicable to employer withholding and not income tax liability, which would open the door to income tax refund requests from individuals displaced by the pandemic for 2020 and 2021.

“We agree that concluding this provision at the end of the year makes sense, but we strongly disagree with changing the law to allow individuals, temporarily displaced by the pandemic, to retroactively file refunds,” said Findlay Mayor Christina Muryn. “This violates both the spirit and the intent of the temporary law that the legislature unanimously passed last year and cities have been relying on to navigate the numerous challenges brought on by the pandemic.”

The local impacts of remote working on municipal budgets varies, but many communities of all sizes could be significantly impacted by a significant shift to remote working. This is because cities are primarily funded through a local municipal income tax, which applies to both residents and non-residents that commute in from a different city to work. The Regional Income Tax Agency (RITA) estimated that if there is a 30 percent shift to working-from-home, 254 of the nearly 300 communities it serves would see net revenue losses, in some cases as much as a 20 percent reduction.  One of those communities is the city of Youngstown, which is projected to see a 21 percent reduction in municipal income tax revenue.

“The long-term impacts of remote working have the potential to significantly impact municipal budgets and the police, fire, and EMS workers who were on the frontlines responding to this pandemic,” said Youngstown Mayor Jamael Tito Brown. “State and local leaders should be working together to address these long-term impacts, not going back in time and changing the rules on cities just as we are trying to recover from this pandemic.”

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The Ohio Mayors Alliance is a bipartisan coalition of mayors in over two dozen of Ohio’s largest cities. Columbus Mayor Andrew J. Ginther, Findlay Mayor Christina Muryn, and Youngstown Mayor Jamael Tito Brown serve on the Board of Directors. For more information, please visit: www.OhioMayorsAlliance.org.