LORAIN — Lorain Board of Education members now favor a 1.5 percent earned income tax proposal for the November ballot rather than the combination earned income tax-property tax they conditionally approved on July 12.
Board members Wednesday unanimously approved — except board Vice President Tim Williams, who was absent from the meeting — the 1.5 percent levy and are expected to give final approval Aug. 3. The permanent levy would raise about $8.2 million annually.
Without passage, Lorain Schools face an $11.4 million deficit in the 2012-13 school year, according to school district Treasurer Dale Weber. Even with passage, the district faces projected deficits of about $4.78 million, $9.29 million and $15.9 million in the next three years.
“In terms of this levy, the city of Lorain is going to decide what kind of school district it wants,” board member Paul Biber said after the vote. “The massive staff cuts that a failure to provide this additional local revenue would generate would make it very, very difficult to continue with the progress that we’ve made.”
The district laid off 27 teachers in May and Superintendent Cheryl Atkinson acknowledged more layoffs could occur even with a levy passage. The goal is minimizing layoffs.
“When you reduce staff you lose services (for) kids,” Atkinson said. “But we can’t act like that’s not a possibility.”
Board Chairman Tony Dimacchia acknowledged that even with the levy’s passage the district will likely be placed in fiscal emergency — in which local financial control is relinquished to a state commission which develops a deficit elimination plan. However, Dimacchia told board members the district could be out of emergency in a year with passage.
With Lorain grappling with rising foreclosures and unemployment, Dimacchia said after the meeting it would be overreaching to seek a deficit-eliminating levy. Voters have not passed a levy increase for Lorain Schools since 1992.
Dimacchia said the income tax, which renters would pay as well as homeowners, was more equitable than a property tax.
“Now is the time to try an alternative levy,” he said before the vote. “Our property owners are tired of always being the ones always taxed.”
The earned income tax would only be on residents living in the Lorain school district and exclude capital gains, dividends and pensions. That should be a selling point to elderly voters, board member Jim Smith said.
“They’re going to say, ‘Why would I object? My grandkids will benefit and it won’t affect me,’ ” Smith said. “If you’re not working for a paycheck, you will not pay the tax.”
Contact Evan Goodenow at 329-7129 or firstname.lastname@example.org.