Oct 27, 2021 - Business

1 in 3 Ohioans may permanently work from home, study says

Likely impact of WFH on income tax collections
Figures are study's "medium" scenarios. Data: Ohio Mayors Alliance; Chart: Jared Whalen/Axios

Working from home is here to stay for one-third of Ohioans, according to a study from a bipartisan coalition of mayors from the state.

Why it matters: The shift is expected to cause large cities like Columbus to lose millions of dollars in municipal income taxes, which help pay for their services, as those workers who live outside city limits no longer commute downtown.

  • Estimates for Columbus range from a 4% to 12% decline in general fund revenue. The capital city is expected to lose the most overall dollars because it has the most workers.
  • Other ripple effects downtown could include less spending at businesses, more vacant offices and decreased property values.

Driving the news: While remote work may have started as a temporary arrangement during the pandemic, many people enjoy it, so more employers are allowing flexible schedules.

Yes, but: A lot is still uncertain and the pandemic isn't over yet.

  • Hybrid schedules, with a blend of office days and remote work, are also a possibility, further complicating the issue.

Flashback: In 2020, state legislation clarified that workers should still pay income taxes to the city in which their employer is located.

  • But the new state budget, passed this summer, says that when filing 2021 tax returns, people can request refunds for income taxes paid if they weren't physically in a city while working.

What's next: The Ohio Mayor's Alliance, which commissioned the study, plans to work with state leaders to monitor potential impacts but is not seeking a "legislative solution" yet, director Keary McCarthy said in a statement.


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