Columbus, Ohio's Income Tax (Part 2)

Indiana’s cities rely on property taxes. When the housing bubble burst they had their own little tax debacle over assessments. See more in The Indianapolis Star.

Ohio’s cities rely on income taxes. Unlike property taxes - paid rain or shine, receipts dented only in cases of tax delinquency - when unemployment rises, tax receipts fall. Instantly. No liens; nothing delinquent.

Many Ohio cities seek jobs above all else. There are more than a few that used to rely heavily on an estate tax, but changes to state law have made that avenue less lucrative. But how, exactly, does a government grow new jobs?

That’s a big enough debate on it’s own. My point is this: as badly as I’d like to see great city services remain in place, as much as I’d love our Columbus neighborhoods to thrive, there’s negligible return. There’s no fiscal feedback loop in place. The only feedback from improved, or at least maintained city service levels might be some love from the electorate and maybe fewer complaints directed at city hall.

Folks can vote for or against the tax increase, they can vote with their feet and move off to the suburbs, but as long as they keep coming to work in Columbus it hardly affects the bottom line.

Update on Wednesday, July 1, 2009 at 11:54 AM by Andy Taylor

Some local bloggers met with Mayor Coleman last Thursday to talk about the income tax increase. They’ve generously posted the audio from their meeting.