Hamilton County Issue #7 Tax Evaluation

Abstract

By Benedict Leonardi, Economics and Mathematics

Advisor: Michael Jones

Abstract: This research sought to estimate the financial impact of Hamilton County's Issue #7 ballot measure, which seeks a repeal of a portion of the city's income tax levied to fund the METRO system in order to replace it with a sales tax. Our work consists of primary data analysis of sales tax collection rates, a summary of tax collection rate estimates from economic literature, and an impact analysis on the City of Cincinnati and Hamilton County. We began by examining which Ohio counties passed sales tax increases over the past 10 years and calculated each county's collection rate. We then read many works of economic research and investigated which estimates from the literature were applicable in our situation and used those to benchmark our primary data investigation. Finally, we used both of these in conjunction to come up with the estimated impact on both of our local governments. We discovered that the ballot measure as proposed will have disparate impacts on both city government (which will stand at a net benefit) and county government (which will stand at a loss) and that those losses will come from more than just the METRO system, including: infrastructure funding, the stadium fund, and lastly, the general fund.