At their July 3rd meeting, the Benton-Carroll-Salem Board of Education voted unanimously to again place a 1% earned income tax issue before voters. The 1% earned income tax was rejected on May 8th by only 50 votes. The issue will appear on the November 6th general election ballot.
If passed, the 1% earned income tax would have to be paid by all district residents who have earned income--regardless of where they work. If passed, the income tax will be for a period of 5 years, and subject to renewal. According to the Ohio Department of Taxation, the 1% earned income tax would generate approximately $1.989 Million per year for the Benton-Carroll-Salem School District to be used for operating expenses.
According to the Ohio Department of Taxation, "earned income" only includes wages and self-employment earnings (including earnings from partnerships). "Earned income" does not include interest, dividends, capital gains, pensions, social security income, rental income, lottery winnings, and income earned by estates. Therefore, these types of income are not subject to the earned income tax.
The earned income tax is collected in the same manner as the state income tax: through employer withholding, or individual quarterly estimated payments, and annual returns. Employers are required to withhold the tax and submit payments to the state under the same rules and guidelines as they currently use to withhold the state income tax. Individuals subject to the tax are required to file an annual school district income tax return.
The Benton-Carroll-Salem School District is facing unprecedented revenue loss through no fault of its own. State officials have confirmed that the magnitude of loss faced by B-C-S has not been faced by any other school district. There are two factors that contribute to these unprecedented loses. The first financial hit is due to the recent de-valuation of the Davis-Besse Nuclear Power Station by its owner, First Energy, through the Ohio Department of Taxation. De-valuation means that the Ohio Department of Taxation reduced the taxable value of the electric generation equipment at the plant. The de-valuation results in an annual loss of $4.6 Million beginning in 2018. A second financial hit facing the District is the phase out of public utility tangible personal property (PUTPP) reimbursement payments from the state at the rate of approximately $278,000 per year, which began in 2015; and this loss is compounding. This phase out continues each year through 2030, which is a total loss of $4.5 Million when the phase out is complete.
A "B-C-S Bridge" payment from the state of approximately $1.8 Million per year for 3 years will help in the transition until the 1% earned income tax can be collected in full. It is important to remember that these funds from the state are temporary, and will end in 2021.
Over the past 7 years, the Board has prided itself on being fiscally conservative by looking at every job vacancy, and asking if staff can be more efficient and effective. The Board's fiscally conservative actions can be seen when looking at payroll expenses (which account for about 70% of the total budget). In Fiscal Year 2012, payroll was $11.5 Million. In that year, the Board made large cuts to staffing levels. As a result, in Fiscal Year 2013, payroll was $9.7 Million. Six years later, in Fiscal Year 2018, payroll expenses remain the same at $9.7 Million. This has been done while being innovative, adding services for students, and being one of the top performing school districts academically in the state. These efficiency measures will continue, but the magnitude of the annual revenue losses mean that the school district simply cannot cut its way out of the situation without drastically reducing educational opportunities for students. The school board is always looking for ways to always be fiscally conservative for our voters, and not just when money is needed.
"This vote is about controlling our own destiny as a school district community. Voting for this earned income tax means doubling down on a very high performing organization in our community in this time of uncertainty," said Superintendent Guy Parmigian.
The B-C-S Board has stated that if the 1% income tax does not pass then they will go on the ballot again because the need will not go away. The Board will soon be announcing community meetings that will be used to deliver information and answer questions. Citizens are encouraged to call the Board Office at 419-898-6210 for more information, or to ask a question.
The Board will be hosting two informational community meetings on the 1% earned income tax issue that will be before voters. The dates are to be determined.
GUIDE ON SCHOOL DISTRICT INCOME TAXES
Click the link below for a guide published by the Ohio Department of Taxation concerning school district income taxes:
FREQUENTLY ASKED QUESTIONS
The voting registration deadline for the November 6th general election is Tuesday, October 9. Election Day is Tuesday, November 6, 2018.
Absentee Voting (Early Voting) begins on Wednesday, October 10, 2018 at the Ottawa County Board of Elections office located at 8444 West SR 163 in Oak Harbor (just west of the Ottawa County Fairground). Voters can show up in person at their office at the following times:
*October 10 through October 26 from 8 AM—5 PM. (Monday through Friday)
*Saturday, October 27 and Saturday, November 3 from 8 AM—4 PM
*Monday, October 29 through Friday, November 2 from 8 AM—7 PM
*Sunday, November 4 from 1 PM—5 PM
*Monday, November 5 from 8 AM—2 PM