Politics
Cincinnati 2026 Budget Ordinance Keeps Earnings Tax at 2.1 Percent
Cincinnati residents who work inside city limits will continue paying the same 2.1 percent earnings tax rate on wages earned in 2027 under the fiscal year budget passed July 1.
How we reported this
The Cincinnati City Council passed Ordinance 2026-87 on July 1, setting the municipal earnings tax rate at 2.1 percent for calendar year 2027 and allocating proceeds to the general fund. The rate applies to wages earned by anyone working within the 79.6 square miles of the city, including commuters employed at downtown offices and manufacturing sites along the Mill Creek.
Why the rate decision matters in 2026
City finance officials project earnings tax collections of $1.24 billion in fiscal year 2027, the largest single revenue source for operations. The figure comes from the adopted budget document released June 15 and reflects wage data through the first quarter of 2026. National economic conditions, including federal spending shifts noted in May congressional reports, prompted the council to hold the rate steady rather than seek an adjustment.
Residents in neighborhoods such as Westwood and Avondale will see the same withholding amounts on paychecks issued after January 1, 2027. The tax funds 42 percent of the Cincinnati Police Department budget and supports 1,850 full-time positions listed in the personnel schedule. It also covers annual payments of $68 million to Cincinnati Public Schools under the existing revenue-sharing agreement.
Direct costs and services for households
A worker earning $52,000 annually at a job in the central business district will continue to owe $1,092 in city earnings tax, the same amount withheld in 2026. Property owners in the 45202 and 45211 zip codes will receive no change in the tax bill tied to their place of employment. The budget maintains current funding levels for the Department of Transportation and Engineering, which plans to resurface 14 lane-miles of residential streets in the coming year.
Implementation begins with payroll system updates required by December 15, 2026, according to the ordinance timeline. The city will issue revised employer withholding tables by September 30. Residents can review individual withholding statements through the city's online portal starting in January 2027.