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Springfield projects roughly $4 million general fund gap for 2027 as income-tax growth slows
Summary
City finance staff told the Springfield City Commission that income-tax growth has flattened since the post-pandemic rebound and that, under current assumptions, a $4 million gap could appear in the 2027 general fund; commissioners adopted the tax budget and approved several related financing and capital items.
The Springfield City Commission adopted the city's 2027 tax budget after a presentation warning that income-tax revenue — the city's dominant revenue source — has slowed sharply since the post-pandemic rebound.
"Revenue growth has slowed significantly," the finance presenter (addressed in the transcript as Katie) told the commission during the public hearing, summarizing revenue trends and the assumptions behind the tax budget. The presenter said income tax accounts for about 77% of general fund receipts and that withholding (employee payroll collections) currently makes up roughly 85% of income-tax receipts while net profit collections comprise about 15%.
That mix matters because policy changes at the state level affecting net operating loss treatment and net profit refunds have reduced predictability and, the presenter said, contributed to weaker net profit collections in early 2026. The presenter reported that income-tax revenue growth totaled roughly $4.1 million from 2023 through mid-2026, compared with more than $9.2 million in 2021-22, and that under current forecasting assumptions the city's projected general fund expenditures of about $63.4 million would outpace projected revenues of about $59.4 million, creating a planning gap of approximately $4 million for 2027.
Commissioners and staff described the tax budget as a revenue planning document required by Ohio law and not a final operating plan. Staff emphasized the next steps: department budget submissions, the city manager's preliminary operating budget (required on file by Nov. 1 under the charter), and fall public hearings where expenditure decisions will be developed.
For planning and cash-flow purposes the commission also approved interim financing and several capital and procurement items tied to operations and infrastructure. Among votes taken at the meeting, all passed by roll call:
- Adoption of the 2027 tax budget and submission to the county auditor (approved by roll call). - Authorization to issue interim notes to continue financing sidewalk, curb and gutter projects (2024C note, up to $1,191,800; and 2026 note, up to $1,065,700) to bridge the period until final assessments and bond issuance. - Award of the 2026 sidewalk/curb/gutter construction contract to C.W. Tree and Outdoor Service LLC (not to exceed $1,427,253.10) for Northern Estates neighborhood improvements. - Procurement approvals including 625 Google Workspace licenses (not to exceed $425,875 over five years) and replacement actuators for the water treatment plant (not to exceed $229,600).
The presenter and commissioners stressed that closing the projected gap will involve a mix of options including expenditure reductions, identifying efficiencies and revenue strategies, and that the formal operating budget process this fall will include more detailed proposals.
What comes next: staff will continue department-level budget work through August—November, the city manager will file a preliminary operating budget by Nov. 1, and commissioners will hold public budget hearings this fall before final appropriations are set.
