Little Miami voters to decide on school income tax in November
Friday, May 02, 2008
Voters will have to decide in November on a 1 percent earned income tax to help fund the Little Miami schools.
The income tax would generate $6.3 million per year, more than double of what the emergency operating levy brought in until it expired in 2006.
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"An earnings tax is different than your traditional income tax, because it does not tax anything but earned wages and self-employment wages," said Lisa Knodel, district spokesman. "This means that pensions, investment interest, Social Security, etc. is not taxed. With an income tax, everything is taxed."
Knodel said that it takes longer for full collection of an earnings or income tax than a regular property-based tax levy, so the district has only one opportunity to pass the earnings tax.
"Little Miami has some financial challenges as we look ahead to plan for the district's future," said district treasurer Shaun Bevan. "The Governor and Legislature's new state biennial budget that went into effect July 1, 2007 really hurt Little Miami's financial outlook."
Bevan said that previous projections estimated Little Miami would receive more than $3 million in state funding this year, but that money has been cut. Due to changes in the state biennium budget, Little Miami will lose $17.53 million over the next four years compared to projected state funding, according to Knodel. During that same time period, district enrollment is expected to grow by about 800 additional students and two new buildings will open, she said.
Despite significant cuts in state funding, Little Miami remains committed to fiscal stewardship while fulfilling its central mission of providing an excellent education to the district's students, Knodel said. The district has implemented several strategies to reduce expenditures.
"Approximately 83 percent of the budget is salaries and benefits," Bevan said. "Both of these areas have been targets of proactive financial planning."
The board worked with teachers to develop an innovative plan to offset health care costs, reducing premiums by 39 percent, saving the district's $13.9 million over the next 10 years.
The teachers also adopted a new salary schedule with savings of more than $200,000 over the typical teacher's career. Due to rapidly growing enrollment, the district anticipates hiring eight additional teaching positions each year. This equates to a savings of $1.6 million.
Other cost-saving measures include:
• Refinancing the bond issue to a lower market interest rate - savings of $1.46 million.
• Redesigning transportation - savings of $400,000-$500,000 by reducing mileage and minimizing bus purchases.
• Replacing leased copiers with more cost efficient copiers - savings of $146,000 off the lease price, $30,000 in interest, and more than $25,000 a year in operational costs. This means the new fleet paid for itself in the first year.
• Eliminating two administrative positions for the 2008-2009 school year - savings of $180,000.
• Implementing a new phone system - savings of about $45,000 annually.
For more on this story, read the May 8 edition of the Pulse-Journal.
Contact this reporter at (513) 696-4507 or rycook@coxohio.com.
