Politics
Ohio Bill Changes Cincinnati's City Funding Structure Starting 2027
Cincinnati residents will see changes in city service funding and property tax allocations starting in the second half of 2027 under the new state distribution rules.
How we reported this
Ohio House Bill 412, enacted by the state legislature in June 2026, revises the formula for distributing a portion of state sales tax collections to municipalities. The measure applies to all Ohio cities with populations above 50,000 and directly affects Cincinnati through revised revenue shares that begin in fiscal year 2027.
The legislation responds to updated state revenue projections released in the March 2026 budget update, which showed sales tax collections running 4 percent above earlier estimates. Lawmakers adjusted the municipal aid formula to reflect those figures while maintaining the existing overall state spending caps.
Changes to city services and costs
City budget planners in Cincinnati expect the new distribution to alter how funds reach police patrols, street maintenance crews and public transit routes. Under the bill, Cincinnati will receive its first quarterly payment under the revised formula in October 2027, replacing the current per-capita allocation with one based on local sales tax generation within each municipality.
Residents who use Metro buses or rely on the city's snow removal schedule will encounter the shift first. The legislation states that any shortfall in one service category must be offset by reallocations approved by city council before the start of the 2028 budget year.
Budget figures and next steps
State documents project Cincinnati will receive an estimated $38.2 million in the first full year of the new formula, compared with $36.9 million under the prior method. The Ohio Legislative Service Commission released those calculations in its June 2026 fiscal note on the bill.
City officials must submit revised spending plans to the state auditor by March 2027. The first visible effects for residents are scheduled to appear in the 2028 property tax bills, which will reflect any local adjustments made to balance the new state payments.