CHICAGO — Ohio municipalities face steep revenue losses — and likely constraints on borrowing ability — under a proposed overhaul of the state's local income tax system.

House Bill 5 represents the culmination of months of lobbying from businesses and municipalities and years of debate over Ohio's infamously complicated local income tax structure. The bill establishes a common tax base by defining what kinds of income local governments can tax and what kinds they can't. Some local governments could face significant hits to their bottom lines if the bill becomes law, municipal officials and economists say.

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