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Miami University researchers tell Beavercreek a 1% municipal income tax could yield about $19M–$20M in 2024 dollars
Summary
Researchers presented a synthetic-control analysis estimating that a 1% municipal income tax in Beavercreek would likely generate roughly $19–$20 million in 2024 dollars; the study assumes a full credit to residents for taxes paid elsewhere and that roughly two-thirds of collections would come from nonresidents who work in the city.
At its Sept. 8 meeting, the Beavercreek City Council heard a presentation from Miami University researchers who estimated that a 1% municipal income tax in Beavercreek would have produced roughly $19 million to $20 million in net collections in 2024 dollars under the study’s assumptions.
Dr. Sarah Larson, an associate professor in Miami’s political science department and a research fellow with the Center for Public Management and Regional Affairs, presented the report and synthetic-control modeling used to estimate revenue that Beavercreek would collect if it applied a 1% municipal income tax between 2013 and 2023.
The study used three comparator groupings of municipalities chosen for socioeconomic similarity and proximity to large federal employers (notably Wright-Patterson Air Force Base) and adjusted for a state-level timing change in employer withholding remittance rules. Key modeling assumptions were a 1% income-tax rate and a 100% resident credit — meaning Beavercreek residents who work in other municipalities would receive a full credit for taxes paid elsewhere.
Student researchers explained other context: Beavercreek currently derives 56.3% of city‑operation funding from property taxes and an additional 14.8% from grants — about 71.1% combined. The report’s authors argued revenue diversification would reduce reliance on property tax, increase fiscal stability through business cycles and better capture revenue from nonresident workers who use city services.
The model’s point estimate using group-B comparators produced a 2024 net collection estimate of about $19,000,000; the presenters emphasized there is statistical error and reported lower and upper bounds to reflect model uncertainty. Dr. Larson said the model suggests about 32% of the estimated collections would be paid by Beavercreek residents who both live and work in the city, and the remaining majority would come from nonresidents who commute into Beavercreek for work.
Student Gracie Cribbs described the concept of revenue diversification and said it helps municipalities manage revenue volatility. Student Brooke Smith summarized pros and cons of income versus property taxes, noting income tax can expand the tax base by capturing nonresident workers while property tax is generally more stable but can burden fixed‑income residents.
Council response: Several councilmembers thanked the research team. Vice Mayor Bales and Councilmember Stewart said the analysis validated long-held assumptions and called the synthetic-control approach "creative." Councilmembers pressed the researchers on robustness checks and statistical fit; Dr. Larson described visual pre/post trend inspections and root-mean-square predictive error (RMSPE) checks and explained why group selection affects model fit.
What the study did not decide: The presentation estimated potential revenues under specific assumptions but did not recommend immediate policy action. Councilmembers and staff said the study provides a tool for further deliberation and that any decision to propose a municipal income tax to voters or implement changes would require additional legal, fiscal and policy work.
Ending: The council received the report and scheduled follow-up discussions; no tax or ordinance changes were adopted on Sept. 8.
