What is on the ballot?
The Firelands Board of Education voted unanimously to place a 1% earned income tax on the November 5th ballot. If passed, the issue would raise an estimated $3.3 million annually, beginning in January 2025.
Why is a levy needed at this time? What would this funding be used for?
Simply put, the levy is critical to ensuring that the Firelands Schools can continue funding essential day-to-day school operations. This funding will be used for our ongoing expenses, most notably: classroom materials and technology, extracurricular activities, transportation services, and the retention of our high-quality teaching and student support staff. It would not be used for any capital projects, such as building or maintaining school properties.
When was the last time Firelands residents passed a new operating levy?
It has been 13 years since the last time the Firelands Schools passed new operating funds, earning 56% of the vote in May 2011. The community supported a bond issue for the construction of our new high school in November 2018. Voters also approved the consolidation and replacement of two previously existing emergency levies in November 2020, which did not raise property taxes.
Why has the Board chosen to ask for an earned income tax, rather than a property tax levy, typically used to fund school districts?
The Board of Education explored both options – an earned income tax and a property tax – before unanimously deciding in July to place the 1% earned income tax issue on the ballot. Given the demographics of our communities, the Board believes that placing the income tax option on the ballot is the most fair and reasonable way to support our school district.
How would an income tax affect our residents?
The proposed earned income tax will apply to ONLY the wages, salaries, and other compensation and net earnings generated from self-employment (to the extent the income is included in modified adjusted gross income of the resident). Many people in our community own their houses / properties, but live on various types of fixed incomes – like seniors, retirees, disabled residents, etc. Those fixed incomes are excluded from the earned income tax.
What forms of income would NOT be subject to the levy?
The income tax specifically EXCLUDES all other types of income and deductions, such as those from interest, dividends, pensions, capital gains, inheritances/bequests – as well as excluding income from Social Security, disability and survivor benefits, child support, direct gifts, workers’ compensation, welfare benefits, etc.
What is the Issue # for the Firelands’ levy?
Issue numbers have not yet been assigned by the Lorain or Erie County Boards of Elections. We will update this FAQ after we have been assigned an Issue number – sometime in August 2024.
What does Firelands’ current five-year financial forecast show?
The five-year forecast shows that the district, like many other organizations, has been affected by inflation. Our annual revenue has remained flat at roughly $21.5 million in actual dollars since 2021 and is projected to remain flat at that level through 2027.
Meanwhile, inflation has driven the value of those dollars down, causing the district to, in practice, lose spending power. Without new revenue, we are projected to have a $3.4 million budget deficit by 2027. Our district’s cash balance would be depleted by the end of the 2028-2029 school year, without significant cuts to educational programming and staffing.
What impact does the recent property tax reappraisal have on your taxes and Firelands Local School District?
The Short Answer: Fundamentally – very little.
It is important to note that property tax reappraisals are generally a good sign of our district’s economy and the overall value of our communities. However, due to the state laws on the books (HB 920, passed in 1976), school districts are prevented from receiving an increase in tax revenue resulting from increased valuation of property.
In other words, when property values go up, any voted property tax millage is automatically reduced to a millage that brings in the same revenue as approved by voters when passed. This means that every taxpayer pays a lower “effective” rate than the first day a levy was passed.
To illustrate this, we can look at the Bond/Permanent levy that was approved for the new high school by the voters in 2018. Millage voted on was 4.28 mills, however, due to the increase in valuation across the district, the effective rate has been reduced to 3.62 mills on residential property. This happens with all voted millage to ensure that districts collect the same amount of revenue that was voted on. As a result, in order for districts in Ohio to bring in additional revenue, they must continually go back to the voters for new or replacement levies.
When do we vote?
Election Day is Tuesday, November 5th. The polls are open from 6:30 am to 7:30pm.
Voting-by-mail and voting early-in-person at the Lorain & Erie County Boards of Elections begins October 8th. Absentee ballots are available by mail, and must be requested by the voter by October 29th. Completed absentee ballots must be postmarked by November 4th.
Who should we contact with questions?