By the numbers
Tax: 1% of earned income
Estimated revenue: $4 million annually
Term: Continued
Annual cost to $25,000/year earner: $250
Annual cost to $50,000/year earner: $500
Annual cost to $75,000/year earner: $750
Sources: Northeastern LSD and Clark County Board of Elections
Northeastern Local Schools is asking voters to reconsider an additional 1 percent earned income tax next month that officials say will stop planned cuts and a projected cash deficit in two years.
The Aug. 6 ballot issue is the same that voters defeated in November last year by less than 20 percent of the votes.
The exact revenue generated each year is impossible to calculate because it’s an earned income tax and depends on the amount active workers within the district make, but Superintendent Lou Kramer said officials have estimated it to be about $4 million.
An earned income tax affects only those who are actively employed and does not include taxes on such sources of income as pensions, retirement, unemployment, interest, rental income, and others. The tax would come out of a worker’s paycheck just as other taxes do.
Projected shortfalls by 2014 prompted officials to reduce its budget by $1.8 million through cuts of 37 staff including 12 teachers, a reduction in building budgets, pay-to-participate sports and activity fees, increased student fees, and others, since May 2012.
Northeastern’s five-year forecast examined by the Springfield News-Sun projects a more than $1.6 million cash deficit in fiscal year 2015 and, by 2017, a nearly $7.9 million deficit.
Kramer said those cuts pushed the projected cash shortage back a year, but the district still needs additional funds to stop a planned elimination of high school busing, a reduction of four additional staff and eliminate general fund field trips.
“We’ve made some painful but necessary sacrifices in staffing and in pay to participate and we were able to move that deficit back from the end of this coming school year one year into ‘15,” he said.
A decline in property values, cuts to state funding, losses in stimulus funding and others resulted in the loss of $2.4 million over the last several, according to the district.
“Our losses to state and local funding over the last four years have really accelerated the process for us to ask for more money,” Kramer said.
A Facebook post by the Springfield News-Sun seeking comments from those for and against the levy garnered about 30 responses from both sides, as well as several who said they’re torn about which way to vote.
One responder in favor of the levy is Andrea Bennett who wrote: “I will be voting yes so students can ride a bus to school, so athletes won’t have to forgo their chance to play a sport because they can’t afford it, so extracurriculars and the extremely talented people who teach them don’t get cut, and so our district can continue to provide a high quality education to our students and support to our community.”
Against the levy, among others, was Greg Evilsizor who wrote: “I will not vote yes for this. Only working people will be effected, for how many years? The district needs to manage the money they get better. Sure their costs rise, but I can not afford another income tax.”
And just one commenter who’s torn about which way to vote is Stephen Branham Sr.
“My son will be going to Kenton Ridge this year. I understand the district’s need for increased revenue, but on the other hand I also understand the need for me to be able to pay the bills I have. It seems at every turn it’s someone wanting to raise taxes. It just gets to the point you have to start saying enough is enough … . Unfortunately you have to start with the taxes you can vote down because there is no voice for the working person in state and federal government anymore,” Branham wrote.
If the levy is defeated in August, it will go back to voters in November and, if that doesn’t pass, more staff cuts, doubled pay-to-participate fees, and further reduced transportation services will be considered, according to the district.
The last operating fund levy passed in 2004, Kramer said.
The board chose an earned income tax over a property tax to diversify the district’s potential revenue sources and to share the burden with all district residents, not just property owners, it’s website says.
“Unlike a property tax, an income tax provides a revenue source, which grows from year to year. This would allow the district to increase revenues from year to year and possibly push back future levies.”
In Clark County, Southeastern and Northwestern local school districts are supported in part by income taxes.
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