Cincinnati’s Development Report Card #1: Total Income Tax Revenue (1985-2014)

I come from a different world:  the private sector and financial assets – assets that are easy to sell and can be monitored on a minute by minute basis as to price and performance.  If  I want to get a chart of P&G’s common stock valuation over the last ten years, or twenty, or thirty I can go to a nearly infinite variety of online sites, customize the data, compare it to benchmark indexes – all for free, immediately, without bothering anybody.

So it’s very frustrating when I look for (what I consider) basic data in a user-friendly form in the city and it’s not available.  Sometimes I get so frustrated I assume the worst.

Recently I decided to stop complaining and just ask people for the information, make my own dang charts and test my assumptions.  Here’s my first one.  Since every single building project we’ve ever subsidized has always been presented with the idea of adding jobs that will result in more income tax revenue for the city, I wanted to see the numbers.  Is this working?  I am very happy to report, it is.

image (13)

*I deleted the data for 2013 as that was the year the City of Cincinnati changed to a fiscal year and the period ending June 2013 only represents 6 months.

Now all we have to do is factor in inflation.  The $116,672,000 we collected in 1985 would be worth $260,170,800 today ( average 2.71% inflation rate).  In 2014 the city collected $340,990,000 – a 31% improvement.

Even though I couldn’t get this information online instantly, staff at City Hall was extremely helpful and had the information for me 24 hours after they received my request.  (Thanks Christine Zimmer in Legal for working 7 days a week to help keep government transparent.  Thanks, Karen Alder, Assistant Finance Director, City of Cincinnati, Finance Department for helping me see the light.)

Why stop there?  Let’s thank our elected representatives on City Council, the revolving door of city development administrators – and gosh – why not? – our commercial real estate developers.  Because what this chart shows is that public policy has chugged steadily along in the right direction no matter who is in office, no matter how many obstacles we put in its path. Democracy is messy, but apparently it works.

Stay tuned for more report cards as I gather the data:  revenues going to Cincinnati Public Schools, property tax collections in the city center, population and average/median income per resident.

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5 thoughts on “Cincinnati’s Development Report Card #1: Total Income Tax Revenue (1985-2014)

  1. Bill Collins

    Kathy: This is very helpful. Sorry you had to dig this info out the hard way, but it’s very useful and provides us taxpayers with good insight. Thanks, and keep digging.

    I look forward to seeing the data on CPS’s tax revenues.

    Reply
  2. Peter

    The increase in earnings revenue may be attributable to more than jobs created (e.g., higher wages). Speaking of jobs created, is there a way to count those? Do specific projects report on actual jobs created vs. planned jobs created? Does the city track the number of jobs paying the earnings tax?

    I recall that one firm (Convergys, Cincinnati Bell spinoff) had to repay some funds to the city because they failed to create the number of promised jobs within the city.

    Reply
    1. executivedreamer Post author

      I am so excited, Peter. Look how sophisticated we’re getting. — What you are talking about is Job Creation Tax Credits. (more info: http://choosecincy.com/services/business-development-resources) The city contracts with a company moving to Cincinnati to return part of their income tax payments if they bring a specified number of jobs. Here’s where the city tracks results very carefully. dunnhumby – for instance – arrived in 2003 and negotiated a credit of up to 75% of income tax payments on 106 jobs created in 3 years – and they had to keep those jobs in Cincinnati until 2015. That one’s been a BIG winner. They actually created more than 450 jobs – and they are really, really good ones (average was over $100,000 annual income as of a couple years ago). GE got a similar deal – also high income jobs.

      Your ideas are great on numbers to track. The more we know – the better our decisions as a community. I’ll add them to my research list.

      Reply
  3. Thurman Wenzl

    Sadly, it’s an ‘earnings’ tax and not an income tax; untaxed income includes capital gains, interest and dividends, making it unfair in that the richest do not pay their share.

    Reply
  4. executivedreamer Post author

    Good point, Thurman. My husband and I experience the benefits of that issue firsthand. And when my Neapolitan spouse (who is one of the most frugal people on the face of the planet) finishes our taxes and says, “We really don’t pay that much, do we?” – well – the pendulum has probably swung too far.

    Reply

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