Columbus think tank recommends cities use remaining ARPA funds to modernize their tax systems
The Buckeye Institute, a Columbus-based think tank, is recommending cities use remaining federal American Rescue Plan money to modernize their tax systems.
The Buckeye Institute said their recommendation will help cities be less reliant on what they call dwindling commuter taxes. In a policy memo released Wednesday, Rea Hederman, Jr. Vice President of Policy said current research shows that since the pandemic, 39% of work is done from home. That greatly reduces a city's tax base.
"It appears permanent that a lot of employees are going to be working remotely. Major central cities in Ohio are going to be losing hundreds of millions of dollars in tax revenue because workers are going to be working at home," Hederman said.
Hederman said lawmakers should offer cities incentives to use ARPA money to transition into better tax models that are less dependent on monies that will not be there.
"Cities need to prepare for a future where their tax base is smaller and they have less revenues coming into the city coffers," she said. "Ohio policymakers should look to the future and prepare for this new paradigm of remote work. And one way we can do this is to have the state legislators use some of the state share of the federal dollars."
The federal Government will soon send Ohio another 2.65 billion in tax dollars from the American Rescue Plan Act.