Jefferson Schools requesting income tax renewal

(Posted Sept. 17, 2018)

By Linda Dillman, Staff Writer

Jefferson Local Schools’ 1 percent income tax expires in a year, but the district is getting a head start on asking voters to renew the levy with a request on the Nov. 6 ballot.

“This will be for a seven-year period,” said Superintendent Bill Mullett during a Sept. 10 presentation to the school board.

“This is the first renewal of our income tax. The original, five-year income tax expires on Dec. 31, 2019.”

Mullett said because the tax is on earned income only, it does not apply to social security, pensions, unemployment and certificates of deposit or savings accounts.

“The levy is absolutely critical for us to continue our current operations,” Mullett said. “It is projected to bring in approximately $1.6 million per year.

“This income tax has helped us balance our tax structure for our community. The other two sources of local tax revenue are derived from property taxes.”

In addition to 20 mills—the legal minimum applied to all Ohio school districts—assessed against all property, the district also has a 9.5 mill emergency levy that expires at the end of 2022.

While passed by voters at 9.5 mills, because of rollbacks, it was reduced to 7.35 mills due to reappraisals.

“One of the concerns for our district—and frankly many, if not most, other districts—has been the lack of increases in state funding,” Mullett said. “We have been flat-funded for several years in a row.

“Factoring in inflation, state funding increases have been flat for decades. This has shifted the tax burden to our local community. The district used to depend upon state funding for about 50 percent of our funding.”

According to Mullett, revenue from the state is down to 32.7 percent, which means the local community now picks up almost 68 percent of school funding.

Another concern voiced by Mullett was the increase in the cost of maintaining aging school facilities and equipment. Prior to a bond issue to refurbish and build additions to existing buildings, voters approved a 3-mill permanent improvement levy.

The district no longer collects the 3 mills, only a state mandated 0.5-mill permanent improvement levy required for Ohio School Facilities projects. A decade later, maintenance is becoming an issue, but without a larger permanent improvement funding source, Mullett said the district needs to dip into the general fund.

“While initially, with newer facilities, that 0.5 sufficed,” he said. “Now, however, our needs are rapidly increasing. Expenditures without a permanent improvement levy must increasingly come out of the general fund.

“That has contributed, along with the typical increased costs of doing business, to deficit spending.”

Mullett said the district experienced $440,000 in deficit spending for fiscal year 2018. Of equal concern is a projection of $1 million in deficit spending for the 2019 school year, he added.

“I believe the district will need to consider a strategy for rectifying the deficit spending that may include restoring a permanent improvement levy (which cannot be used for salaries/benefits) to our funding,” said Mullett.

“This also identifies how critical it is to maintain the current two levies—the 9.5-mill emergency levy and the 1 percent earned income tax (renewal), which will appear on the Nov. 6 ballot.”

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