TPS puts income tax of 0.75% on ballot
2/10/2010Toledo Public Schools officials hope city voters will say yes to part of their paychecks going to the district.
For the first time, TPS is seeking an income tax to add revenue to the district that is facing a $30 million deficit.
The Toledo Board of Education yesterday approved putting a 0.75 percent earned income tax request on the May 4 ballot that would generate $18.1 million for the district.
Board member Larry Sykes voted against the resolution, which passed 4-1.
"I wish them the best, but I just felt I didn't have enough information to make that decision," he said.
Mr. Sykes asked for - but never received - information about how much the district pays in legal costs to an out-of-town firm, the amount of money food service loses, how much income is generated through the sponsorship of charter schools, as well as additional requests.
Mr. Sykes said that without more information about district finances and proposed cuts, he couldn't support the tax.
But school board President Bob Vasquez said the district is not prepared to present final district cuts - and he said the district doesn't want to put proposals out there to scare voters into supporting the schools.
"I've received a lot of pressure to come out with a list of cuts, but we don't want to go into a situation where the public thinks we're threatening them," he said. "Once we determine what those cuts are, we want them final."
The district faces a $30 million budget deficit that is largely caused by reductions in state funding and changes to local property tax revenue, which include higher-than-average appeals of property values that have a negative impact, TPS Treasurer Dan Romano said.
The income tax would generate $18,173,704 a year for the district, which still leaves TPS with millions to cut from its budget.
District officials are working on a plan to trim $17.5 million from the books even if the tax issue were to pass.
And if it fails, TPS would need to cut the full $30 million deficit before the next fiscal year starts on July 1.
District Superintendent John Foley said that before voters go to the polls on May 4, TPS will have to fully explain its budget situation and why it needs community support.
"We've got to make the case for an impact of a full $30 million deficit," he said. "I think people understand education is important and they want to support it if they can."
A $30 million cut represents nearly 10 percent of the district's $290 million budget.
Last year, when TPS needed to trim $10 million because of declining enrollment and other factors, it meant closing two elementary schools - Nathan Hale and Fulton.
The cuts also included reducing staff by more than 110 positions, and each department trimmed its spending by 10 percent.
Closing schools could be a way to help address the current budget deficit, officials said.
In past budget cuts, the numbers presented for closing a building and reducing some of its staff were savings of $2 million for a high school, $1 million for a middle school, and $450,000 for an elementary school, Mr. Foley said.
"If we're going to have to cut $30 million, this district is going to be bare bones," Mr. Foley said. "It's not going to be an easy task."
The school board did consider a new property tax along with the income tax option.
A 6.9-mill continuous levy would have generated about $19.3 million a year .
But district leaders recommended and the board decided to go a different route with an income tax for the first time.
Lisa Sobecki, the school board's vice president, said she has heard for years from residents that the district needs to find a different way to support schools other than property taxes.
"It will be an opportunity to see if the community wants something different and supports something different," she said.
The earned income tax is different from a traditional income tax for school districts because it excludes pensions, unemployment payments, and interest and dividends.
Those who live within the TPS district would pay the income tax, regardless of where they work. And the tax does not apply to people who work in the district but live elsewhere.
School district income taxes are handled by the state and are either directly deducted through payroll taxes of paychecks or are filed annually with taxes.
A person with a $30,000 income would pay $225 annually with the new 0.75 percent income tax.
Board member Jack Ford said he supported the income tax simply because the district needs the money.
He volunteered yesterday to garner support for the tax during the 10 public speaking engagements he has scheduled before the May primary.
"I support the kids and we need the money," he said.
"If people think we made any strides in our school system recently, if we do not support our schools this time we will see a retreat and I don't think we want that."
Mr. Ford and the other board members admitted to the challenges of approaching voters for a new income tax at the same time the city of Toledo is looking to increase its income tax.
"It's a realistic concern we have that there's more than one tax issue on the ballot, but we feel at this point we don't have a choice," Mr. Vasquez said. "We'd prefer not to have to go to the voters. But we have to."
Contact Meghan
Gilbert-Cunningham at:
mcunningham@theblade.com
or 419-724-6134.