Question A: Increased work-from-home practice will reduce Ohio municipal revenues over the next few years.
Question A: Increased work-from-home practice will reduce Ohio municipal revenues over the next few years.
Question A: Increased work-from-home practice will reduce Ohio municipal revenues over the next few years.
Question A: Increased work-from-home practice will reduce Ohio municipal revenues over the next few years.
| Economist | Institution | Opinion | Confidence | Comment |
|---|---|---|---|---|
| Jonathan Andreas | Bluffton University | Agree | 4 | It will decrease revenues somewhat because it will increase Tiebout choice and increase competition between jurisdictions to reduce local taxes. That isn't necessarily a bad thing because local income taxes are administratively inefficient (high transactions costs per dollar) and often relatively regressive compared with state and federal income taxes. Very few states/nations have ever imposed local income taxes separately from state/federal income taxes for this reason and we also have a fourth income tax for local school districts. It is administrative madness! Ohio would grow better with fairer and more efficient taxation. |
| Bizuayehu Bedane | Marietta College | Agree | 7 | |
| Glenn Dutcher | Ohio University | Uncertain | 9 | We are certainly in a transition as the majority of companies employing white-collar workers are stating they intend to make the hybrid work design permanent (workers come to the office 2-3 days per week). Very few firms are adopting 100% remote work. These hybrid designs do not lend themselves to buying a house too far from the office spaces. This has led to a demand for better home-offices, which is reflected in real estate price surges for larger residences. This will eventually lead to demand for better amenities where individuals live. So, while we may see some reduction in revenue in the locations for the traditional office spaces, we may see an increase in revenue in the locations where people live. The increased revenue where people live may more than offset the reductions in revenue in more urban areas given the large increases in pay we are witnessing for these workers. |
| Kevin Egan | University of Toledo | Disagree | 8 | This is only relevant in the limited case for a worker who lives in a township with no income tax and also they actually file for the refund. I do not expect many people to fall into this category. |
| Kenneth Fah | Ohio Dominican University | Uncertain | 8 | |
| Hasan Faruq | Xavier University | Disagree | 7 | |
| Nancy Haskell | University of Dayton | Agree | 7 | |
| Paul Holmes | Ashland University | Agree | 5 | Increased work-from-home will decrease revenues a lot in pre-pandemic worker-importing counties (those with fewer residents per job offered), while increasing them in worker-exporting counties. Overall, if current tax rules remain (i.e. incomplete credit for local taxes paid in non-home counties), tax revenues should decrease. Some worker-importing counties may need to raise tax rates to meet the shortfall, which could be significant. Long term, this could change residence patterns; I could see a scenario where a county tried to attract higher-income residents with low local income taxes. |
| Michael Jones | University of Cincinnati | Strongly Agree | 9 | With fewer people working in cities though, municipal costs should go down. It's an open question though if city leadership will cut costs at a rate proportional to the loss in revenue. |
| Fadhel Kaboub | Denison University | Uncertain | 10 | Very few workers will take advantage of this, except individuals in the highest income brackets who also happen to work remotely from home in municipalities that have low or no income tax. This is the result of a race-to-the-bottom public finance philosophy, and in this case would need to be offset by support from the State of Ohio (or the Federal government). |
| Bill Kosteas | Cleveland State University | Uncertain | 8 | We need to factor in how WFH practices affect location choices. Does this lead to more people leaving expensive coastal cities and settling in lower cost Ohio (especially for Ohio natives)? What about outmigration of Ohioans who are now free to live anywhere even while their jobs are "in Ohio?" |
| Charles Kroncke | Mount Saint Joseph University | Disagree | 8 | |
| Bethany Lemont | Ohio University | Agree | 5 | I agree but I doubt it will be a significant reduction for most cities. In order for a worker to avoid paying this tax they would need to primarily work from home, not live in the same city where their place of work is based, know about this tax rule, live in a city with a smaller municipal tax rate than the one for the city where their work is based, and then take the time to file for it. I don’t imagine that very many people will be benefiting from this tax reduction. Additionally, even for people who benefit from this, the amount of money that they wouldn’t be paying towards their work city as a result of this is probably relatively minor in comparison to the city’s overall tax revenues. |
| Trevon Logan | Ohio State University | Uncertain | 8 | |
| Michael Myler | University of Mount Union | Disagree | 6 | |
| Joe Nowakowski | Muskingum University | Agree | 7 | |
| Cort Rodet | Ohio University | Uncertain | 5 | The outcome for any particular municipality will be highly dependent on the proportion of locals who commute out versus those that commute into the area. In theory, working from home could result in a net loss, net gain, or revenue neutrality depending on the location. College towns and places where a significant chunk of the labor force commutes into the location only for work stand to lose the most. |
| Lewis Sage | Baldwin Wallace University | Uncertain | 1 | |
| Kay E. Strong | Independent | Disagree | 8 | This appears to be a simple "redistribution" issue. If a person is employed--and assuming being paid above the table---then taxes will be collected at the point of service---the business location or a remote location or both. Perhaps, a more interesting question is: What is the employer's obligation to source an employee's tax obligations appropriately based on work location and whether local, same state or different state? |
| AJ Sumell | Youngstown State University | Uncertain | 1 | I don't foresee it having a significant difference in municipal revenues. Depends how many more or less people work from home in a given municipality. |
| Melissa Thomasson | Miami University | Disagree | 9 | Tax laws restrict this |
| Ejindu Ume | Miami University | Uncertain | 5 | |
| Andrew Welki | John Carroll University | Strongly Disagree | 8 | |
| Kathryn Wilson | Kent State University | Agree | 5 | |
| Rachel Wilson | Wittenberg University | Uncertain | 7 |