Speedometer Pinion Gear

CudaFactHackJob said

But the radius of a 27" tire would be about 12" from the center of the wheel to the ground (if it's a radial).

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That does not matter. It is the circumference of the tire that determines how far it travels down the road, and thus determines the exact gear ratio, and so affects the speedometer. If a circle of 85" is round (your 27" tire), or if one side is squished down and it is not exactly round, the distance around it is still 85".