WCPO: What to know about Issue 7 in Hamilton County

UC economics professor Michael Jones weighs in on potential effects of tax changes

With Ohio's primary elections postponed because of the ongoing public health crisis stemming from the novel coronavirus pandemic, Hamilton County voters have more time to mull the possible effects of the passage of Issue 7. 

Drafted by the Southwest Ohio Regional Transit Authority in September 2019, the ballot measure would increase the county sales tax from 7% to 7.8% while reducing the city of Cincinnati's income tax from 2.1% to 1.8%. The measure would shift Cincinnati Metro's funding source from the city to the county, with 75% of the new sales tax levy going toward operational and capital costs. The remaining 25% would go toward bridge and road repairs, reports WCPO's Pat LaFleur.

LaFleur turned to Michael Jones, associate professor of economics with the University of Cincinnati Carl H. Lindner College of Business, to get a better understanding of how these changes would impact city and county tax revenues. A comprehesive analysis Jones and UC student Benedict Leonardi performed under the auspices of the Kautz-Uible Economics Institute at UC — which Jones directs — calls into question county revenue projections.

"When proponents claim that the 0.8 sales tax will raise $130 million for public transit and infrastructure, the actual collection will be roughly $5 million less," Jones told WCPO. 

"He based that prediction on an analysis of a recent 0.25% sales tax levy in Hamilton County, implemented in 2015, which found that levy raised about 96% of the projected funds," according to the WCPO story. "Jones said his conservative estimate of how much the 0.8% increase could raise is 95% of projections or higher."

About the Lindner College of Business

At the Carl H. Lindner College of Business, we are committed to developing the next generation of business leaders. By nurturing business problem solvers for more than 110 years, we’ve served as catalysts for innovation and cutting-edge research. Through experiential learning and personalized career development, our students graduate with a competitive advantage in the workforce, ready to tackle global challenges.