August 1, 2014

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Lorain schools considering income tax

LORAIN — Deficits are up, and enrollment is down. School district staff has shrunk from 1,276 in 2002 to 910 with the layoffs of 27 teachers Wednesday night.

The district hasn’t had a levy increase since 1992 and loses about $5,500 every time a student leaves the district for open enrollment or a charter school.

The Board of Education knows it needs money, but with the economy stagnant and austerity trumping stimulus in Columbus and Washington, it recognizes it needs to spread the responsibility for who pays. To that end, board President Tony Dimacchia said the board is considering seeking an income tax levy that spreads the responsibility for paying to all Lorain residents.

“The only way to fund public education is (on) the backs of the taxpayers,” Dimacchia said after Wednesday night’s Board of Education meeting. “We don’t like that, but we didn’t create that formula. The state of Ohio created that formula.”

Dimacchia said he supports reinstating the Tangible Personal Property Tax. The tax, which relied on taxing business inventory, is being switched to the Commercial Activity Tax, which taxes businesses’ gross receipts. The switch costs school districts and local governments about $1.65 billion per year, according to the Ohio Department of Taxation.

Dimacchia also supports reinstating the corporate income tax, which Ohio abolished in 2005, and raising taxes on Ohioans who earn $250,000 or more per year to raise money for schools.

However, those moves are unlikely to occur in the Republican majority state Legislature where Gov. John Kasich and fellow Republicans have made tax cutting a priority, saying it will spur prosperity. So the board at a June 29 special meeting will discuss the local income tax.

Dimacchia said board members haven’t decided on how much the tax should be if they propose it, but said it would be a fairer and more stable way to raise revenue.

“We want to make sure we give that levy the best opportunity to pass because it is critical to continuing the education in this district,” he said.

Besides layoffs and teacher union concessions, the board is planning to borrow $4.7 million against the renewal levy voters passed in May as part of $13.5 million in reductions that include $2 million in teacher union concessions. However, the board faces projected deficits of $11.35 million in the next school year, $24 million in 2013-14 and $38.9 million in 2014-15.

Dimacchia said the board, which is developing a plan to retain and recruit students, can’t continue to cut staff.

“You hate to cut anybody from a job. You’re putting them out of their livelihood,” he said. “It’s the reality of not having any revenue in the school district. We’ve tightened the belt as tight as we can get it.”

Contact Evan Goodenow at 329-7129 or egoodenow@chroniclet.com.