LAKE COUNTY, Ohio — There are 65 school funding issues on the May ballot statewide, according to the Ohio School Boards Association. What is unusual, they say, is that most, 33, are income tax requests.
More school districts are choosing to go that route to avoid the unpopularity of increasing property taxes in Ohio.
Two school districts taking this approach are in Lake County: Wickliffe City Schools and Painesville City Local Schools.
The superintendents told me they know it’s a tough ask, but feel they have no other choice amid reduced revenue and rising costs.
Both districts are asking for an income tax on earned income, which would not take money from seniors on fixed incomes or retirement funding.
What is an earned income tax?
According to the Ohio Department of Taxation's website the Ohio school district income tax provides revenue to support school districts. School district income taxes are only passed by voter approval. This tax is separate from any federal taxes, state taxes, city income tax, and property taxes.
Ohio has two different types of taxing school districts, traditional and earned income.
Earned Income: This method taxes employee wages earned plus net earnings received from self-employment that are included in the modified adjusted gross income. Retirement income is not taxable under this method.
CLICK HERE for more information from the Ohio Department of Taxation.
Wickliffe City School District
I met Mary Pritschau in Wickliffe, where she’s recently retired.
We talked about the school’s income tax request on the May ballot that would only impact residents who make a paycheck, not seniors on a fixed income.
"I think a lot of the retired, fixed-income seniors would appreciate that," said Pritschau. "However, so many of us have kids, grandkids, and we know how important the school system is."
She worries about what’s happening.
"Cutting programs left and right, and these are things that we had when we were growing up and we didn’t seem to have these issues," she said. "It’s important for the kids.”
After two failed levy requests last year, the state required Wickliffe schools to come up with a deficit-reduction plan to balance the budget.
More than $2.3 million in cuts begin next school year, including 32 fewer positions, no full-day kindergarten, busing and electives reduced to state minimums, and all sports will be pay-to-play at a cost of at least $1200 per student-athlete.
The pay-for-play was supposed to begin this spring, but Wickliffe Superintendent Mike Chokshi says a 2004 graduate stepped in and donated $95,000 to cover costs for all spring athletes.
"It would be really difficult to cut much more because we’re cut to the bare bones right now," said Chokshi.
Now, Wickliffe City Schools’ income tax request is for 1% on earned income. It would cost about $66 a month or $790 a year for the median household in Wickliffe of about $79,000 annually.
Chokshi said this levy request is for operating expenses, separate from the bond issue voters passed seven years ago for the new campus.
He said 2015 was the last time voters approved new money for day-to-day expenses and says their state funding has been flat for years.
“I think over the last five years the consumer price index has gone up almost 30%,” said Lou Galante, district treasurer. “We have the same money that we had five years ago but it’s really 30% reduced and so we’re just trying to make it work.”
Chokshi said the future of the district is at stake.
"The kids are going to lose out on opportunities, and our kids are not going to be as competitive as kids in other districts if we don’t pass this,” he said.
Painesville City Local School District
The superintendent of Painesville City Local Schools, Josh Englehart, said the district is in a financial position he did not anticipate.
Painesville City Schools lost almost 6% of its funding in the state budget passed last summer.
“Our revenue is reduced $2.25 million year-over-year just like that, and then it’s flatlined for the second year,” said Englehart.
It is a significant hit for a district with about 2,600 students all on free and reduced lunches, and a big reason why it's so heavily state-funded.
Now, for the first time in 14 years, the district is asking for new money in the form of a proposed income tax on the May ballot that would raise $3.4 million.
“Which will, if successful, will allow us to just barely balance our budget,” said Englehart.
He said that’s in addition to $3.5 million in cuts already made.
He said those cuts include 34 positions impacting teaching and non-teaching, as well as some clubs, programs, and activities. The cuts also include reduced work calendars for about 170 employees. They have also instituted an administrative salary freeze.
“If we’re unsuccessful and if we have to attempt to balance the budget through cuts alone that’s going to be the closure of a school," he said.
The district’s proposed 1.25% income tax levy request would apply only to earned income, not fixed income like retirement.
It would cost about $37 a month or about $444 a year for median-income households of $35,000.
About 70% of Painesville City Schools' funding comes from the state, while about 16% of their total revenue comes from local dollars.
According to state data, similar districts average about 24% local funding, and statewide, the average is nearly 47% local dollars.
“We’re now graduating 96%-97% of our kids who are career-ready with career credentials," said Englehart. "We don’t want to see any of that effort be comprised.”
Englehart said they felt an income tax on earned income was the most equitable way they could ask their community for new money.
He says he knows some residents are tax fatigued.
I spoke with one off-camera, who told me—no more.
Others, like Alex Campbell, 18, a high school senior in Painesville, said he's willing to give up some of his salary from his job at a grocery store.
"I would be willing to do that because I support education, and I support our local community," said Campbell.
Painesville City Local Schools is holding an upcoming public information session for community members on April 29 at 7 p.m. at Heritage Middle School.
What does the state say?
I talked with state Senator Jerry Cirino (R), Kirtland, who represents this area and chairs the Senate finance committee. I asked him about the superintendents' frustrations with state funding.
He said the state's contributions to schools are fair, and lawmakers have taken action to provide property tax reductions for Ohioans, and said income tax requests are a local decision up to the voters.
Cirino also said some districts may need to consider combining.
"I think what’s going to happen in the future is whether these income tax levies pass or not, I think with reductions in property taxes that we’re going to see from legislation we passed, I think school systems are going to be forced to look at ways to consolidate and ways to cut costs," said Cirino. "Eliminate redundancies in administrative costs if they’re going to survive in the future."
Katie Ussin is the Lake County and We Follow Through anchor at News 5 Cleveland. Follow her on X @KatieUssin, on Facebook KatieUssin, Instagram Katie_Ussin_wews or email her at Katie.Ussin@wews.com.
