This breaking development is more on the provincial side, but it is of great importance to Ohio municipal corporations (and those that advise them). Ohio recently enacted Substitute House Bill 5 (“HB 5”), which overhauls Ohio’s municipal income tax law. The provisions of HB 5 take effect for taxable years that begin on or after January 1, 2016. Attached to this post is an analysis prepared by Squire Patton Boggs of HB 5’s significant provisions.
The Ohio Legislative Service Commission reports in its Fiscal Note and Local Impact Statement (pdf) on HB 5 that the new law is likely to result in a net revenue loss to Ohio municipalities. The Legislative Service Commission states in this Fiscal Note and Local Impact Statement that although the “total revenue losses to municipalities [as a result of HB 5] are undetermined, and delayed to future fiscal years, they may be significant, potentially millions of dollars annually.” Given the potentially significant revenue losses that HB 5 is likely to cause Ohio’s municipal corporations, it will be interesting to see what effect, if any, HB 5 has on the credit ratings and credit rating outlooks of Ohio’s municipalities.