I didn't really know where to put this questions but...

 

What is the history behind Cincinnati's 2.1% income tax?  Why does Cincinnati need these funds when other cities are able to operate without them?  When was it enacted? Was it supposed to be temporary?

 

And, how much of a disadvantage for employment and population does this tax place on the city?

 

I know Columbus has one as well, but how are cities like Indy able to operate without one (I believe they do not have an income tax for the city). 

 

Anyway, I was just curious. 

You're looking in the wrong place. Indianapolis is Marion County in their Unigov setup, and Marion County has a 1.62% income tax.

 

"Tax Rates

 

Individual State Income Tax: 3.4%

Corporate Adjusted Gross Income Tax: 8.5%

Sales & Use Tax: 7.0%

Marion County Option Income Tax: 1.62%"

 

http://imaps.indygov.org/ed_portal/template.asp?page=taxes

You're looking in the wrong place. Indianapolis is Marion County in their Unigov setup, and Marion County has a 1.62% income tax.

 

"Tax Rates

 

Individual State Income Tax: 3.4%

Corporate Adjusted Gross Income Tax: 8.5%

Sales & Use Tax: 7.0%

Marion County Option Income Tax: 1.62%"

 

http://imaps.indygov.org/ed_portal/template.asp?page=taxes

 

Oh right right, I forgot about the merged city-county aspect. thanks for pointing that out.

All Ohio Cities have earnings taxes. It's a strange old model that exists only in a handful of primarily midwestern states. In many other states cities can collect business taxes and have significantly higher property taxes (but less school board property taxes) along with cities getting sales tax too.  In Cincinnati the city only collects about 10% of the property taxes you pay. In many other states the city collects significantly more yet property taxes are lower overall. In fact, in many states property tax levies like the ones we used to fund any Social services don't even exist. Also state governments in other states share way more with municipal governments.  Basically there are all kinds of funding options, and Ohio is used the individual earnings tax method. It's quite a mess, and made sense hundred and 50 years ago but is pretty crappy now. That being said, the benefit is that individual municipalities can decide their revenue and taxes. In a world where state governments are more frequently run by far right conservatives bedtime decreasing all government revenue, a city can choose its own taxes

 

Cincinnati's 2.1% is interesting. In Columbus it's 2.5%. 1.8% goes to general fund, .7% goes to capital. Additionally they have a county wide sales tax to pay for transit.

 

Our system, however, is significantly more complicated. Cincinnati gets 1.55% to general fund. .15% for general capital. .1% for infrastructure, and then .3% goes to SORTA. We are the only municipality in Ohio that funds a transit system and its completely idiotic. Currently in Cincinnati .1% of earnings tax is about $14-16 million.

^Correct.  I suspect a big reason why Cincinnati was so late to make transit publicly owned was because the county's political climate wasn't ideal for a transit tax in the 1960s.  Basically no county politician wanted to go to bat for it.  The city earnings tax was supposed to be a temporary situation.  SORTA put county sales taxes on the ballot in 1979 and 1980 that would have replaced Cincinnati's earnings tax.  Neither of them passed.   

Interestingly enough Cincinnati doesn't have the largest income tax in the metro.

 

Covington has a 2.5% income tax. Compared to Cincinnati's 2.1% you have to wonder why companies would desire Covington when you can be in Cincinnati. Perhaps because property is more expensive in Cincinnati and maybe state income taxes are higher in Ohio to balance it out.

 

St. Bernard is also at 2.1% and Norwood is close at 2.0%.

I think Wyoming's overall earnings tax is higher, because they have a separate income tax specifically earmarked for the schools. 

^Correct.  I suspect a big reason why Cincinnati was so late to make transit publicly owned was because the county's political climate wasn't ideal for a transit tax in the 1960s.  Basically no county politician wanted to go to bat for it.  The city earnings tax was supposed to be a temporary situation.  SORTA put county sales taxes on the ballot in 1979 and 1980 that would have replaced Cincinnati's earnings tax.  Neither of them passed. 

 

Actually it had more to do with the Gettler family (big Republicans) owning the bus company.  The city only passed a tax (and the county had it on the ballot) to bail the Gettlers out when they ran it into the ground and preserve bus transit for those who rely on it.  Basically city/county didn't want to compete, but then were forced to take it over when the "free market" destroyed public transit.  I suspect this is also why we never jumped on the light rail band wagon back in the 1960/70s.  Oddly enough, Tom Luken was a big opponent of Gettler and actually fought to make the system more accessible.

Luken was lobbied by General Electric, Westinghouse, and others in the subway/commuter rail/light rail industry in the mid-late 1960s.  The brochures and letters are in the file he donated to UC's Blegan Library.  Cincinnati's earnings tax doubled from 1% to 2% while ostensibly anti-tax Luken was mayor. 

Luken was lobbied by General Electric, Westinghouse, and others in the subway/commuter rail/light rail industry in the mid-late 1960s.  The brochures and letters are in the file he donated to UC's Blegan Library.  Cincinnati's earnings tax doubled from 1% to 2% while ostensibly anti-tax Luken was mayor.

 

OK, did he do what they asked?  Or did they just ask? Did he reply to them?  Just curious, cause I have no idea.

I think Wyoming's overall earnings tax is higher, because they have a separate income tax specifically earmarked for the schools. 

 

There are around 100-200 municipalities in the state that collect that sort of tax. Bexley is another.

>OK, did he do what they asked?  Or did they just ask? Did he reply to them?  Just curious, cause I have no idea.

 

Luken played both sides of Cincinnati Transit's demise.  After Metro's formation, he harassed SORTA and periodically threw mud at OKI. 

 

In hindsight we could not have known just how critical the Luken period was.  Nixon signed UMTA into law in 1970, which is what bailed out NYC by paying for a lot of subway maintenance, but there was tons of money for other cities.  MARTA, the Miami Metrorail, Baltimore subway, etc., all got money out of UMTA 1970.  People like Luken played games because everybody assumed that there would be a UMTA 1980, a sum surely in excess of the $10 billion 1970 act.  Except Reagan was elected and not only did UMTA 1980 not happen, he cut the level of support the federal government was giving outside UMTA.  That's when you saw federal subsidation of municipal transit *operations* disappear, sans that portion allocated to ADA out of the federal gasoline tax. 

 

UMTA was expected to be like the highway bill -- resigned every 5-10 years.  Instead it never reappeared.  All that lobbying by GE, etc., in the late 1960s was done in anticipation of a future in which *every* US city was going to have a federally-built rapid transit system.