October 25, 2014

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Lorain school board weighs deficit options

LORAIN — An earned income tax or property tax levy may be placed on the November ballot to eliminate Lorain Schools’ $2.85 million projected deficit.

Treasurer Dale Weber briefed Board of Education members at their Monday meeting on Lorain’s options. Weber said a decision is needed by early July whether to put a levy on the ballot.

Weber said an earned income tax levy of 0.25 percent would raise about $1.3 million annually and cost a worker earning $50,000 annually an additional $125 yearly. A 1 mill property tax increase — would raise $557,000 annually. It would cost the owner of a $100,000 home an additional $30 to $35 annually.

An earned income tax would exclude capital gains, dividends, pensions and Social Security, which could make it popular with elderly voters who wouldn’t be affected by it. Weber said about 190 Ohio school districts, including Oberlin and Wellington, rely on income tax levies.

Weber said after the meeting that the deficit is primarily due to Lorain losing students to charter schools, open enrollment and vouchers. Lorain, which has an approximately $93 million annual general fund budget, will lose $25.4 million in state taxpayer money due to shrinking enrollment. The 6,600-student district has lost about 3,500 students in the last decade.

Weber said other factors include about $5 million in delinquent taxes owed the school district by local taxpayers and the Legislature’s cap on funding to school districts in the biennial budget.

Lorain received $67.4 million in state money in 2013-14, but would’ve received $76.2 million without the cap.

Weber emphasized “step increases” — incremental raises partially based on academic qualifications and seniority — were not a major factor in the deficit. Weber said the increases, about $639,000 this year, were factored into his five-year forecast.

“I don’t think that’s the issue,” he said.

While undecided on whether to propose a levy this November, board members expressed support for an earned income tax to relieve pressure on homeowners. A permanent earned income tax levy failed in 2011 while a property tax levy passed in 2012. However, it was the first new levy passed since 1992 and came in a presidential election year when voter turnout is usually high.

Board member Tony Dimacchia said a 1.5 percent earned income tax for a set number of years is “something we need to consider.”

Dimacchia said the district needs to increase enrollment but said shrinking enrollment is due to an unfair advantage the Republican-majority Legislature gave charter schools. Charters, which are predominantly nonunion and pay teachers less than public schools, are privately run but publicly funded.

While Lorain Schools were placed in academic emergency and taken over by the state last year due to low test scores, Dimacchia said many charter schools are underperforming. The Ohio Department of Education’s 2012-13 report found the “absolute achievement” of charter students was “poor,” with 60 percent of charter schools receiving a D or F grade. About 40 percent of charters are on academic watch or in academic emergency.

“They’re not failing because they’re educating kids well or have good practices. They just aren’t working,” Dimacchia said. “Hopefully the community understands what those schools are about and what they do.”

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


  • oldruss

    In November 2012, the voters in the LCSD passed a new 4.8 mill emergency operating levy, that was supposed to generate some additional three million dollars ($3,000,000) annually. Now, we are told by the LCSD that there is an anticipated deficit of some two million eight-hundred fifty thousand dollars ($2,850,000). What’s wrong with this picture?!

    • Denise Caruloff

      oldruss…and if I recall…didn’t they take a loan out right after that levy passed?..To start….if this board is truly looking for money…why are they throwing money away with a contracted lawyer..when they can use Pat Riley for free!!! Hire a firm as needed if and when. What happened to those 8 or 9 proposals the board received? That contract would start in july 1st 2014 for 3 years…or did they get over looked like the letter from nancy greer inviting the board to the council meeting re: tax money.

  • stillsleepyeyes

    and didn’t they hire someone to collect the taxes?………..what happen to that………tax tax tax…………….that’s all they know………….what about jobs jobs jobs…………….what a flipping town…………..

  • SniperFire

    ‘While Lorain Schools were placed in academic emergency and taken over by the state last year due to low test scores, Dimacchia said many charter schools are underperforming. ‘

    This is a typical Leftist false argument. (Thanks for being consistent, Evan)

    The question is, are the charters schools performing any better than the public district they are in, thereby giving parents a better choice?

    • Pablo Jones

      Well it is expected that the charter school will under perform the normal public schools. For the most part the top performing students in a school district don’t go to the charter schools they stay in the public schools. A large percentage of the kids in Charter schools are the students that the public schools already failed to teach.

      So looking at the same kids, if there was just the public school they would have dropped out. With the charter school they are taking the kids that essentially have already dropped out and allow them to continue their education. To me that sounds like they are doing better than the public schools.

  • LookBackTwo

    Weber said other factors include about $5 million in delinquent taxes owed the school district by local taxpayers ….. So, collect the taxes! If some of Lorain’s finest aren’t forced to pay their taxes, why should anyone else pay theirs?

  • SniperFire

    The money spent per pupil in Lorain continues to soar:

    http://ode.legislature.state.oh.us/chart.php

    It is over 12K per student. Compare that to the 8.5K per student in Keystone.
    It isn’t about the money.

    ‘ Lorain, which has an approximately $93 million annual general fund budget, will lose $25.4 million in state taxpayer money due to shrinking enrollment. ‘

    This is a false argument designed to deceive. Funding per student continues to grow.

    If Lorain City Schools can’t teach a kid with 12k per year, something is wrong.

    • golfingirl

      Avon and Avon Lake do it for about $9k…….with far better results.

  • stillsleepyeyes

    Want more students????? how about getting back the ones on the far west side that go to Amherst that live in lorain???? You know the same ones from the cra district………… I’m sure Amherst won’t have a problem with it…………

  • Sis Delish

    Charge a $25.00 excise tax on the Rover Festival Attendees… its a start.

  • Pablo Jones

    “will lose $25.4 million in state taxpayer money due to shrinking enrollment.”

    When I know that isn’t per year, but notice how they didn’t clarify that with a time period. Probably over ten years or more. But things always change with state budgets, so it is a meaningless number.

    • luvmytoaster

      C’mon citizens of Lorain – procreate! You can have those enrollment numbers back up in no time…..

  • GreatRedeemer

    I agree it’s not step increases, the reality is pension and health care obligations are ever increasing. The School District’s required contributions for pension obligations to STRS Ohio for the fiscal years ended June 30, 2013, 2012 and 2011 were $4,416,636, $5,272,058 and $5,565,834, respectively. School District’s contributions for health care for the fiscal years ended June 30, 2013, 2012, and 2011 were $339,725, $424,996, and $449,307, respectively.

    https://ohioauditor.gov/AuditSearch/Reports/2014/Lorain_CSD_13_Lorain.pdf

    Now, I concede that an income tax is a far better alternative than a property tax. The thing is, its rewarding failure. Declining enrollment is because the school system is failing in its job not because competition exists. Parents have only so many years to provide for their kids, they are going to choose what they believe to be the best opportunity, right or wrong. Fundamentally and it’s not unique to Lorain, school funding, public sector union demands need to evolve. Districts, especially the larger urban one’s have become increasingly more interested in keeping the status quo.

    • SniperFire

      ‘. The School District’s required contributions for pension obligations to STRS Ohio for the fiscal years ended June 30, 2013, 2012 and 2011 were $4,416,636, $5,272,058 and $5,565,834, respectively.’

      Do you know if there were extenuating circumstances for this rapid increase @ Lorain, or is this a statewide matter?

      • Pablo Jones

        Pension contributions are 14% of the teachers wages. The teachers contribute 10%. I think back in 2009 contribution rates were raised, but that would have been before the years listed.

        Some contracts or modifications occasionally have the school district paying for the employees pension contribution. Usually forgo pay increase of 2% this year and next and the school district will pay 2% additional into the pension so the employee only pays 8%. I haven’t seen too many cases where the school district pays for the teachers portion. You typically see this with principals or superintendents.

        The problem with the teachers pension plan is that the pay out isn’t sustainable. The draw down is something like 7% per year of what was contributed for their pension. (Talk to any financial person and they will say at most draw down at 4%) Their website used to have the breakdown listed where after something like 4 years they have been paid everything they have ever contributed and in 8 years they have been paid back everything that has ever been contributed. Now sure you have the money they have earned investing it, but that can’t keep up with a 7% draw down. Basically current and soon to be retirees are going to live off the contributions of current employees. Eventually that money will run out. When that happens you can bet they will turn to the government for a bailout.

        • Sis Delish

          When their benefits are involved is the Only time Educators are Conservative… all other times, very Liberal with other’s dollars.

  • Harry

    How about teachers and staff giving up some salary. Many people in the private sector have had to do this. If one teacher making $70,000 per year would give up $2,000 in salary, according to the earned income tax, this would raise as much as sixteen residents earning $50,000 per year and paying the income tax. They state that at fifty-thousand per year, this increase would raise $125.00 per year. One teacher giving up just $2,000 would cover sixteen workers. Or better yet, do both. There are quite a lot of teachers earning this amount of money and many, many more earning much more. They need to sacrifice as well.

    • Daniel Sutter

      With the last tax levy the teachers (only teachers) were given everything they ever gave up (taking them from the 2nd highest paid teachers in the county and to the highest paid teachers by leaps and bounds). No others were given back wages.

  • Harry

    How about one teacher earning $70,000 per year, of which there are many, giving up $2,000 per year? This would generate enough money at $125.00 per $50,000 earned per taxpayer, to pay for sixteen tax payers. The teachers need to share in the hurt, that the private sector has suffered for the last six years. Many of us have given up salary and or given up raises. It’s not fair to the taxpayers to pay for pensions and health care for public workers, when they themselves don’t enjoy such benefits. Many teachers in Lorain earn well above $70,000 per year, for nine months of work. I am sure that the median income for the city of Lorain is well below that level.

  • Daniel Sutter

    Hopefully the Obama voters that pass everything that somebody else has to pay for are hiding their heads in shame and wont be seen at the poles again.

  • Daniel Sutter

    I hear better stories from charter schools then city schools. If you don’t have a parent (lorain) that cares then nothing will work. If grades were related to welfare benefits then you would see a improvement. Apparently dumping money into a failing school system isn’t working. Need to do something else.

  • Sis Delish

    Savings can be had if they would retire (FIRE) older, tenured teachers before they become Really Expensive to Retire. Give the new grads an opportunity to fail just as badly as the current crop of educators, at a reduced cost to The Taxpayer.

    • Pablo Jones

      Pensions don’t cost the school districts money when teachers retire. Until they run out of money and want the taxpayers to bail them out.

      • county_elector

        Taxpayers have NEVER had to bail out the teachers’ retirement system.

        • Pablo Jones

          Never….Yet. At least in Ohio. Illinois is under funded by how much? Only current money coming in and drawing down their funds are keeping it afloat.

          In Ohio they have already had to increase contribution rates to make up for their short falls. But that is only a delay of what is to come. They need to either significantly increase contributions or reduce their benefits they pay out.

          Keep in mind most of the teachers that have retired in the last 30 years were making much less. Over the last 30 years teachers salaries have increased much faster than inflation. That means more money was coming in than going out. Now the cash supply is tight with raises that aren’t as generous as they once were. The incoming cash that was always increasing will start to level off just as those retiring will be collecting maximum benefits.

          If deals can’t be reached to raise contributions or reduce benefits, the cash will run out and they will be asking for a bailout. Just watch.

  • JoyceEarly

    Board member Tony Dimacchia said a 1.5 percent earned income tax for a set number of years is “something we need to consider.” They are proposing to have Lorain’s income tax rate to be 4%? Seriously? It’s already 2.5%. The highest of any city in the County. These people are nuts!

  • TheRustyScupper

    If this is truly due to kids going to Charter Schools (as statred in the article), then the system should need fewer teachers and staff. Lay off the teachers in a direct ratio to the kids moving from public schools. Lose 10% kids, lay off 10% teachedrs adn staff. VOILÀ! Problem solved. Lorain schools haven’t been good for decades, and Charter Schools SHOULD get more and more kids.

  • SniperFire

    Raise the tax, Lorain. Works for us.
    The rest of us sure as hell don’t want to pay any more thru the State.

  • fortheluvof

    I think with all the levies and tax for everybody that signing up for social security at 62 will be equal to take home pay. I wont work so everybody is getting a little of my sweat equity.

  • HankKwah

    “…the deficit is primarily due to Lorain losing students to charter schools, open enrollment and vouchers.”

    You don’t think it has anything to do with the fact that the school district stinks, the city doesn’t know what it’s doing and is rife with crime, decaying neighborhoods, and people are moving out of the area in droves?

    Nah, it’s GOTTA be the charter schools.

    • JoyceEarly

      They were moving out in droves before the point of sale inspections went into effect. Now they are walking away from their homes and letting the banks take them adding to the blight, vacancies and crime. Another great piece of legislation by an administration with no vision. And what about all these vacant lots created by the demolition which the city can’t keep up with the high grass. Don’t forget the mayor wanted to appoint Giardini to head the schools. Ah what tangled webs we weave when we practice to deceive!

      • HankKwah

        They’ve been moving out for years now. They were moving out when the whole CRA mess was created, which is partially why it was created. Democrat rule in this town has been a ridiculous joke. And there’s so much of a mess to clean up, none of ‘em knows where to start, so they pick some little corner and try sweeping the stuff under the carpet.

  • golfingirl

    “Lorain school board weighs deficit options”

    Solution is simple….

    Live within your budget, and there are no deficits.

  • Sis Delish

    Your Mommy does.

    Did you struggle to come up with your Screen Name, or are you, too ineligible for the Death Penalty?