Super, board: income tax more fair

By Nancy Spencer, The Delphos Herald
Published:  Wednesday, February 3, 2010 (1 month, 1 week ago)
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DELPHOS — Board of Education members here met in special session Monday to approve a resolution requesting the Ohio Department of Taxation commissioner to estimate the rate of a 1 percent earned income tax the district will place on the May Primary Ballot.
Board members approved the measure, which is the second of three steps needed to place the income tax on the ballot, unanimously.
During the meeting, Superintendent Jeff Price showed a PowerPoint presentation outlining the district’s need for additional revenue and what an earned income tax is and what it would mean to the district as well as taxpayers.
“We decided to go with an earned income tax because it seems to be the most fair tax,” Price said. “The tax is based on what people earn, not what they own.”
The income tax applies to wages and self-employment and farm earnings, including partnerships.
Social Security, disability income, pensions, interest, dividends, capital gains and rental income will not be taxed. Other excluded items include alimony and child support, railroad retirement benefits, taxable scholarships and fellowships, unemployment, welfare, lottery winnings, inheritance or property received as a gift bequest or inheritance.
“This tax doesn’t create an unfair burden on people on fixed income or penalize parents who have decided to stay home and raise their children,” Price said.
If passed, the earned income tax levy will generate approximately $1.5 million and has potential to fluctuate — increasing when wages earned in the district are up and likewise decreasing when wages earned are down.
The levy will also fill a $100,000 budget shortfall for FY 2010-11 and more than a $260,000 shortfall in FY 2011-12 because federal stimulus money has to be used by September 2012.
“We have to  do something,” board member John Klausing said. “It’s not going to get any better on the state’s side.”
If the levy fails, the board and administration will need to study other available options to eliminate the deficit, including reducing programs for students and asking for an additional property tax.
“We are spending tax dollars wisely,” Price said. “We have quality but not elaborate programs for our students. If this tax fails, we would have to take a look at those programs and perhaps make some tough choices.”
In the past three years, the board has made the following reductions in staff and programming.
• Elementary music teacher
• 1/2-time athletic director
• High school reading program teachers
• Middle school computer teacher
• Varsity assistants in all sports and several advisor activities eliminated
• Reduction of extended time for staff
• Superintendent and treasurer salary freeze for 2009-10 and 2010-11
• Reduction of secretary hours in central office
• 30 percent reduction in principal supply budgets
• Bus routes reduced and 2.5 drivers eliminated
• High school  and middle school certificated librarians (2 positions) reduced to non-certified positions
• Activities and athletic transportation fees implemented
Delphos City Schools is one of the few districts of its size in the area that does not have an income tax. Comparable to Allen East, Bluffton, Columbus Grove, Spencerville and Wayne Trace, Delphos collects 44 percent of its funding from the state and the remaining 56 percent is funded by local millage at an effective rate of 26.86. Allen East collects 68.5 percent of its funding from the state and has 25.41 effective mills on the books. Bluffton receives 53.8 percent of its funding from the state and has 26.27 effective mills and a .50 percent income tax on the books. Columbus Grove collects 65.1 percent of its funding from the state and has 22.08 effective mills and a .75 percent income tax. Spencerville receives 66.2 percent of its funding from the state and has 22.06 effective millage and a 1 percent income tax on the books. Wayne Trace collects 64.6 percent of its funding from the state and has 23.83 effective mills and a 1.25 income tax on the books.
“We are one of the few districts of our comparable size that does not have an income tax on the books and we are also the least funded from the state,” Price said.
Price said putting the 5-year, 1.46-mill current expenses operating levy which failed on Nov. 3 back on the ballot is no longer an option.
“The operating levy is no longer a viable solution,” Price said. “It would not collect enough revenue. We have lost an entire year of collections to build reserves. We would be back on the ballot again in 2011 just to maintain current programming.”
The board will approve the final resolution necessary to place the earned income tax on the ballot at the 8 p.m. Monday meeting in the administration building.

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