Revenue Tax Study

Miami University researchers recently presented the results of a municipal revenue and income tax study to Beavercreek City Council, outlining how diversifying the city’s revenue streams could strengthen its long-term fiscal health.

The research project was conducted by the Center for Public and Regional Affairs at Miami University and led by Dr. Sarah Larson, associate professor in the university’s Political Science Department. The project examined municipal income tax revenue projections and provided a comparative analysis of funding structures used by cities across Ohio. As noted in the study, the City of Beavercreek is one of three cities in the state without a municipal income tax. The other two — Cortland and Bellbrook — are significantly smaller in both population and geographic size.

The project also highlighted the concept of revenue diversification, which involves expanding the number of revenue sources and identifying who pays certain taxes in order to reduce overreliance on a single stream or a specific population. The study stated that revenue diversification is considered a key factor in maintaining fiscal stability, reducing volatility, and providing municipalities with more flexibility during economic fluctuations.

The study found that property taxes currently make up 56.3% of Beavercreek’s estimated $53.6 million in 2025 revenue, with grants accounting for an additional 14.8%. Altogether, these two sources represent 71.1% of the city’s total funding. The university’s analysis noted that while property taxes provide stable funding for essential services, they do not grow at a rate in line with inflation and can become burdensome for residents on fixed incomes.

To evaluate the potential impact of an income tax, Miami University researchers used synthetic modeling, a mathematical method that constructs a “synthetic” version of Beavercreek using characteristics from similar municipalities. The model drew on factors such as unemployment rates, median income, average home prices, education levels, municipal profits, and major employers. Cities near the Glenn Research Center in Cleveland and the John W. Bricker Federal Building in Columbus were among those used for comparison.

Using this approach, the university estimated that if the City of Beavercreek had enacted a 1% municipal income tax with a full credit for residents working in other municipalities, it likely would have collected approximately $19.6 million in 2024, with a margin of error between $19 million and $20.2 million. Many municipalities in the Miami Valley currently levy income taxes between 2% and 2.25%. 

According to the study, most of the projected income tax revenue would come from nonresidents who work in Beavercreek but live outside the city. The study estimates that about 32% of the revenue would come from Beavercreek residents who either work within the city or are employed at Wright-Patterson Air Force Base and would therefore be subject to the new municipal income tax. The remaining 68% of revenue would come from non-residents who live in other communities and are likely already paying income taxes where they live. 

The report also analyzed the broader fiscal implications of income taxes, noting that they broaden the tax base and can help reduce income inequality through their progressive structure, as higher earners contribute more. However, income taxes can be more volatile than property taxes because they depend on employment levels and wages.

Miami University’s findings emphasized that a combination of revenue sources is generally considered best practice for municipalities. By diversifying revenue streams, cities can stabilize funding, mitigate the impacts of economic cycles, and maintain greater control over local fiscal policy.

The full presentation can be viewed as part of the September 8, 2025, Beavercreek City Council meeting, which is available on the city’s website and YouTube channel. Additional documents can be found below.