The Willoughby-Eastlake Board of Education has moved forward with plans to place a 1.5% earned income tax on the ballot for the upcoming election in May. The board unanimously chose this option over a proposed 2.25% income tax, citing the need for a more acceptable rate for voters. If approved, the tax would specifically target wages and other earned income of residents within the district, excluding pensions, Social Security, capital gains, and investment income.
This new tax structure aims to replace four of the five existing emergency levies that currently rely on property taxes. According to a presentation given to the board, the 1.5% tax is projected to generate approximately $28.2 million annually, which is about $1.4 million less than the current collections from existing levies.
Tax Relief and Implementation Timeline
The shift to an earned income tax could provide significant property tax relief for residents. District officials estimate a reduction of approximately $415 per $100,000 of home value, equating to a potential 17% to 20% decrease in total property tax bills, depending on specific locations within the district. If voters approve the measure, the income tax would come into effect in 2027, with full collections commencing by 2028.
The decision to pursue the 1.5% tax comes in the wake of Ohio’s new property tax laws, which aim to mitigate significant increases in tax bills. These recent changes restrict school districts’ options for levies, eliminating the previously used emergency operating levies that allowed for fixed revenue without increasing millage rates.
Community Reactions and Concerns
During a board meeting on Monday, public comments lasted over an hour, revealing divided opinions among residents. Critics of the proposal expressed concerns regarding “tax stacking” and questioned the validity of the district’s financial projections. In contrast, supporters argued that the transition to an earned income tax is essential for protecting senior citizens and sustaining school services in light of stagnating state funding.
The board’s decision to avoid the higher 2.25% income tax was influenced by apprehensions that this rate would face significant opposition from voters. Several board members deemed the 1.5% proposal to be a more realistic approach to garnering public support. As the school board prepares for the May ballot, the outcome will significantly impact the district’s financial landscape and the community’s educational services.
