On May 7, 2019, Benton-Carroll-Salem citizens will have the vote on three different issues:
1) RENEWAL LEVY: 3.9 Mills for Operating Expenses. NO NEW TAXES
2) RENEWAL LEVY: 1.2 Mills for Permanent Improvement Expenses. NO NEW TAXES
3) NEW: 1% Earned Income Tax Levy
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 has resulted in year to date loss of $2.1 Million. 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.
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.
BENTON-CARROLL-SALEM LOCAL SCHOOLS
January 28, 2019
"WOULDN'T IT BE A SHAME"
OAK HARBOR—The Benton-Carroll-Salem Board of Education met for a Special Meeting on Thursday, January 24th at 7:30 AM. The Board held discussion and then a vote on authorizing three issues to be placed on the May 7, 2019 ballot. Two of the issues are renewals: a 3.9 mill Operating Levy and a 1.2 mill Permanent Improvement Levy. If passed, the renewals would result in no new taxes for B-C-S residents. The third issue is a 1% earned income tax, which was on the ballot previously, and which if passed would generate approximately $1.9 Million Dollars per year.
Before voting, Treasurer Cajon Keeton advised the Board: "The fact of the de-valuation of Davis-Besse is real. Our property tax collections year to date are down $2,134,039.00, a loss of 37.13%. If that wasn't enough, a key payment from the state is being phased out at the rate of about $300,000 per year. This is not a situation where we can trim 'a little fat' off and be okay. Together these losses are catastrophic."
The Board also asked Superintendent Guy Parmigian for a profile of the school district without the passage of the 1% earned income tax. Dr. Parmigian responded: "Without the new revenue, B-C-S would look much different than the top performing district we have all grown to expect. For example, we may have classrooms with 30 or more students; have state minimum busing that only went through grades K-8 and only when the distance is two miles away from the school; have school buildings that close at the end of each school day--closed to community activities or biddy programs; not being able to afford sending our talented music students to participate in contests or perform in our area churches on Sunday; have to dramatically increase pay to participate fees for athletics, and have fewer course electives for high school students." Parmigan added that B-C-S is at a tipping point. "It would be a shame if we did not take our destiny in our own hands at the May 7th ballot, and had to begin the process of making the kind of cuts that would decimate the future of Benton-Carroll-Salem School District. Are we going let one company [the devaluation of Davis-Besse] determine the fate of B-C-S," Parmigian said.
Dr. Parmigian concluded: "I can tell you sadly that if this earned income tax issue does not pass on May 7th, B-C-S Schools will be forced begin the process of implementing budget reductions for the start of the 2019-2020 school year--reductions which will have grave negative impacts on our students and school district."
After further discussion, the Board voted unanimously to place both renewals and the 1% earned income tax on the May 7th ballot. Board members made it clear that they want the community to understand what the future holds for B-C-S if the income tax issue is unsuccessful. The Board also understands the financial impact of asking for new taxes. Many residents do not have extra money and have told board members they are proud of their school district, but an additional levy is a financial burden to their household. The income tax for B-C-S is an investment in the future. While no one may want to pay more, we have come to the end of having the absolute lowest taxes in northwest Ohio. We need to decide if having a good school is worth the investment. We believe it is, and we urge you to please make this investment for the future of our children.
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, which provides a great deal of detail on the earned income tax:
The voting registration deadline for the May 7, 2019 general election is April 8, 2019.
Absentee Voting (Early Voting) begins on April 9, 2019 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 should click the link below for early voting dates and times: