As tax season gathers momentum, many residents find themselves questioning whether the money they pay is too much. Rising costs of living often make any form of taxation feel burdensome, and local levies are no exception. Yet new research suggests that, at least in Ohio, city service taxes may be providing far more value than many people assume, particularly when it comes to supporting thriving commercial areas and long-term economic stability.

A recent study by University of Cincinnati economics professor David Brasington indicates that these municipal taxes are not excessive. Instead, they play a crucial role in maintaining the public services that keep communities functional and attractive to businesses. Funds collected go towards essential areas such as fire protection, public transport, road repairs, and the maintenance of parks and shared spaces. According to Brasington, communities that continue to invest in these services tend to experience better economic outcomes than those that choose to reduce funding.

The research, published in Regional Science and Urban Economics, examined what happened in comparable towns and cities that made different decisions about local taxes. Some communities voted to cut or reduce their service taxes, while others chose to renew them. Brasington and his team then tracked the level of commercial property redevelopment over the following years to see whether these policy choices made a measurable difference.

The contrast was striking. Areas that maintained their taxes — and therefore their public services — consistently saw more redevelopment of commercial properties than those that opted for cuts. The tax measures studied covered a broad range of everyday services, from bus drivers’ wages to landscaping in public parks. When taxes were reduced, these services were often scaled back, leading to less well-maintained infrastructure and fewer resources supporting daily community life.

Brasington explained that the message from the data was straightforward. Communities hoping to protect their commercial tax base and encourage new investment are better served by renewing local taxes rather than trimming them. This held even for towns experiencing financial pressure. While cutting taxes might seem like a quick solution or a way to attract businesses, the evidence showed that strong, reliable public services actually create a healthier environment for commercial growth.

That said, the findings were not without nuance. Most of the redevelopment benefits appeared in service-focused communities rather than manufacturing-based ones. Additionally, for cities experiencing population decline, the results were less definitive. While there were signs that maintaining public services could help encourage some redevelopment, the evidence was more suggestive than conclusive. Even so, the research challenges the common belief that lower taxes automatically lead to stronger business success, pointing instead to the importance of well-funded local services in building vibrant, resilient communities.

More information: David M. Brasington et al, Effect of local government taxes and spending on the redevelopment of commercial property, Regional Science and Urban Economics. DOI: 10.1016/j.regsciurbeco.2026.104202

Journal information: Regional Science and Urban Economics Provided by University of Cincinnati