How Granville School Will Use the New Money if an Earned Income Tax Passes
By Michael Sobul
As published in the Newark Advocate April 4, 2018
On the May ballot, the Granville School District has placed an issue that would levy a five-year earned income tax. If enacted, the new earned income tax would allow for the reduction of some existing property taxes. After taking into account the reduced property taxes, there would still be a net increase in revenue to the school district. This is the first time the district has been on the ballot for additional money since 2013.
There have been many questions in the community about the uses of the additional revenue from the tax. Over 75 percent of the new money from the earned income tax will be used continue the outstanding work currently being done to make Granville one of the best school districts in the state and to adequately address the district’s aging buildings, bus fleet, and technology.
The district’s operating budget, which is primarily used to pay salaries, benefits, and utilities, to purchase classrooms supplies, and to keep buildings clean and safe, is about $29.4 million this school year. As the pie chart shows, 80 percent of that $29.4 million is used to pay the salaries and benefits of the current staff. The remaining 20 percent is primarily used for the other purposes mentioned above.
Unfortunately, the total revenue going into the operating budget this year is only $28.6 million. The district is spending more money than it is receiving in revenue. This is a direct result of the end of the levy cycle that began with the passage of the 2013 levy. The lack of revenue growth built into Ohio’s school funding system leads to district spending exceeding revenues on an annual basis several years after a new levy is passed, necessitating additional new levies.
Over the next five years, projected spending to maintain current levels of services will exceed projected revenues to pay for those services by an estimated $12.1 million. The revenue from the earned income tax will offset that shortfall so that educational services can be maintained at current levels.
Separate from the operating budget, the district also has a capital budget that is primarily used to maintain buildings (flooring, roofing, heating and cooling, etc.), replace aging buses, and to insure the district is keeping up with ever-changing technology. The district has a 20-year capital maintenance plan in place to meet these needs. However, the current amount of revenue available is insufficient to meet the expected needs reflected in the 20-year plan. Over the next five years, $2.4 million generated from the new earned income tax would be allocated to meet these defined ongoing capital needs.
As indicated above, over 75 percent of the revenue from a new earned income tax would be used to maintain current operations and meet existing capital needs. The remaining new income tax money, less than one-quarter of the total generated over the next five years, has several potential uses, which would be determined by future Boards of Education.
The first potential use would be to protect the district from unexpected cost pressures. These unexpected pressures may be due to reduced funding from the state, unexpected capital costs beyond routine maintenance because of our aging buildings, or new state spending mandates.
The second would be to strategically add staff to maintain targeted class sizes, to augment safety of students and staff, to provide new educational programs to expand student learning opportunities, or to make improvements to district buildings and athletic facilities. Finally, the district would be able to bolster its cash balances (the equivalent of your saving’s account) to meet future needs. Any of these uses would be determined by future Boards of Education.
Hopefully, this article clearly lays out the planned and potential uses of the additional revenue the school district would receive from a new earned income tax. Please do not hesitate to contact me at firstname.lastname@example.org if you have any questions. There will also be an opportunity to ask questions at a public forum the district will be sponsoring at the Middle School on April 18 at 7:00 PM.