Residents of the Gibsonburg Exempted Village School District will decide a request for a 1 percent, 10-year income tax on the May 7 primary election ballot.
The resolution approved by the school board to place the issue on the ballot requests $950,000 annually for operating expenses from an income tax levy.
The tax would be levied on the earned income of district residents. The Ohio Department of Taxation defines an earned income tax base for a school system as the earned and self-employment income, including income from partnerships, of the residents of the school district.
According to financial statements the district filed with the Ohio Auditor’s office for the fiscal year ending June 30, 2012, Gibsonburg schools had revenue of about $8.1 million. About $5.4 million came from state foundation payments and just under $2 million from real estate taxes.
Expenses reached $8.8 million, including $5.4 million for personnel and $1.9 million for retirement contributions and insurance.
A five-year projection the district filed with the Ohio Department of Education last October shows it received $744,926 in federal grants in 2011 but only $8,456 in 2012.
Property tax allocations were $402,403 in 2010 and $404,632 in 2011 but dropped to $289,048 last year. The forecast for 2013 and 2014 is $291,804 and $292,534 respectively.
“The district continues to receive alarming news from the Sandusky County Auditor’s office regarding property tax delinquencies. Currently, the Gibsonburg Exempted Village School District has over $190,000 in property tax delinquencies that the auditor’s office is attempting to collect. The increased delinquency rate has prompted the Sandusky County prosecutor to begin examining ways to use legal action to ensure tax payments. Unfortunately with the high foreclosure rate and the lackluster sales of foreclosed homes, the district continues see to growth in local delinquencies,” the projection states.
Without revenue from the income tax, the district is projecting total revenues of $8.1 million for fiscal 2014 – about $18,000 less than it received in 2010.
If the tax is approved, Gibsonburg would be the fourth school district in Sandusky County to enact an income tax.
The Clyde-Green Springs District has had a 1 percent income tax since 2009; the Fremont City School District has a 1.25 percent tax that went into effect in 1994 and the Lakota School District has a 1.5 percent tax that went into effect in 2005, according to the department of taxation.
A school income tax is collected in the same manner as the state income tax – through employer withholding, individual quarterly estimated payments, or annual returns, according to the taxation department.