“Our tax revenue, which is the backbone of our general fund, has flattened. After years of strong growth post-pandemic, the rebound is behind us,” Eviston said.
From 2021 to 2022, the city saw an increase of more than $9.2 million in income tax revenue. From 2023 through May 2025, the city saw just $3 million in income tax revenue, Eviston said.
She cited a combination of factors: permanent changes to remote work tax law, slower wage growth and “broader economic uncertainty.”
The city no longer has unallocated American Rescue Plan Act or CARES Act funding. More than $5 million in ARPA dollars were necessary to balance the 2025 general fund.
“Without those temporary dollars, we would have seen immediate cuts to services,” Eviston said. “There is no separate rainy day fund to soften these shocks. When income tax declines, the impact is quickly felt in our day-to-day operations.”
The city expects longer-term progress with its upcoming transition to the Regional Income Tax Agency (RITA) to collect municipal income tax July 1, along with planned residential development and economic growth across the city, Eviston said.
“But these efforts take time to generate sustained recurring revenue, and until they do, we must hold the line on spending, focus on core services and continue the work of identifying efficiencies wherever possible,” Eviston said.
The city’s main source of revenue is income tax, though it does benefit from real estate taxes for the special police levy, police and fire pension and conservancy district. These are small benefits and the majority of the Springfield Police Division’s operating budget comes from the general fund.
The city had previously estimated a 3.5% increase in 2025 income tax but are now seeing 0%, Eviston said.
“Today, we’re tracking flat at 0% and have already seen two months of year-over year decline out of the first five full months of the year,” Eviston said. “That level of decline hasn’t occurred since the early days of the COVID shutdown and before that, not since prior to the passage of the 0.4% income tax levy.”
The city is projecting a “cautious” 2.5% increase “for comparative purposes,” which Eviston called “cautious optimism.”
In 2026, income tax will make up more than 80% of the city’s general fund, Eviston said. Data at the end of 2025 will be slightly off due to the RITA shift leading to collected income tax being recorded the following January instead of December, so 2025 will only reflect 11 months of income tax revenue.
A hearing held June 17 was one of the first steps in planning for 2026 income tax revenue. The city commission must then adopt a budget by July 15. After that, internal city departments will meet to submit budget requests for expenditures.
Springfield must have a preliminary budget by Nov. 1, a requirement of the city charter. There will be two public meetings in November to discuss the budget.
Springfield is not an isolated case, Eviston said in response to a question from Mayor Rob Rue.
“RITA serves over 400 member municipalities and for the first time this past quarter, they sent out a notice to all members that they are noticing a trend and a decline in the collection of income tax revenue,” Eviston said.
Vice Mayor Dave Estrop criticized the Ohio General Assembly for taking away local government funds a reduction from 6% to 3%.
“We’ve got to increase revenue, we’ve got to decrease expenditures, or we’ve got to do a little of both,” Estrop said. “That’s what it’s going to come down to ... and the state has not been helping us there.”
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