Voters in the Bellefontaine City School District will see a 1 percent earned income tax levy on the Nov. 3 General Election that district officials say is critical to support continued operations as expenses are climbing and state funding has been significantly reduced.
If approved, the issue would generate approximately $3.5 million per year for operating expenses on a continuing basis, with collections beginning in January 2027. The $3.5 million figure is based on the latest Ohio Department of Taxation estimate provided to the district using fiscal year 2024 information.
The school district income tax is residence-based. A resident who lives within the Bellefontaine City Schools boundaries would be subject to the tax on qualifying earned income, regardless of where that person works.
Generally, retirement income and investment earnings would not be taxed by the levy under the proposed earned-income structure. Individual circumstances can vary, so taxpayers with questions should consult a tax professional or official Ohio Department of Taxation guidance.
BCS Superintendent Brad Hall outlined the district’s current financial picture and need for the levy during a recent interview with the Chronicle.
“Our expenses and cost of doing business continue to increase,” he said. “We were in a meeting talking about diesel at almost $6 a gallon and how expensive it is to run our buses right now, actually.
“So, everything from personnel costs to fuel costs, everything is going up, and it hasn’t kept up with the expenses. So, we are in a deficit spending pattern.”
At the same time, Hall related that the district is facing the finance pressure of receiving less state funding than in the past, a trend that will gradually worsen in the upcoming years.
Receiving less state funding “is significantly hurting us,” the administrator said. “It seems like the state of Ohio is almost wanting to get out of the business of funding public education and putting it on the backs of the local communities.
“For example in 2022, 62 percent of our funding came from the state of Ohio. And they've reduced that now for 2027 to 49 percent.
“By 2031, that's going to be reduced to 36 percent.
“The state is continuing to reduce funding as everyone’s costs continue to go up. We’re not alone in this, it's happening statewide, forcing school districts to go out and ask the community, our voters, to further support our school.”
Hall explained one of the reasons for reduced state funding for public schools is that the money is being diverted to the Ed Choice voucher program for private schools.
“They are diverting $2.75 billion away from public schools to the Ed Choice voucher program.
“So essentially some people view it as a tax break for the wealthiest Ohioans who are going to send their children to private schools anyway. They're getting a reimbursement or a reduction in their tuition.”
At the same time, BCS has made major budgetary cuts in recent years. Hall noted that since 2019, the school district has made $3.5 million in reductions.
Many of the reductions were in staffing costs, including salary and benefits. Schools are personnel-intensive organizations. In the current BCS forecast, salaries represent 58.2 percent of General Fund expenditures and employee benefits represent 24.39 percent. Together, salaries and benefits account for roughly 83 percent of General Fund spending.
“We were able to make the reductions mostly through attrition, not filling vacant positions,” Hall said. “We were able to reduce another million dollars from the end of last year to the beginning of this school year.
“So, we want our community to know that we're being good stewards of our taxpayer dollars. We felt like this would be the best time to ask our community to consider that 1 percent earned income tax.”
The superintendent also related that per pupil spending for BCS was at $10,583 for the 2024-25 dataset. Among the 607 school districts in Ohio, BCS is 44th from the bottom in per pupil spending.
“So, saying that another way, 93 percent of the school districts in Ohio spend more per pupil than Bellefontaine City Schools.
“This 1 percent (earned income tax levy) would only allow us to continue to maintain the current programs that we have. It's not planned for any extras, no add-ons.
“So, we have a very conservative approach in the past and I believe we provide an extremely high-quality education and we do it at less of a cost per pupil.
“Here's another statistic. If we just spent the state average in Ohio, what the over $12,000, right? If we increased our spending to just the state average, we would spend $7.2 million dollars more annually than we currently do. Just going to the average per pupil spending.
Hall also explained why the BCS Board of Education opted for an earned income tax instead of another property tax levy.
“We didn't feel like there was a really a tolerance for additional property taxes and so the district went with the earned income tax. It would be a broader tax base and would not increase the burden solely to property owners.
“Had the school district gone with the property tax, it would have been an $8.7-million property tax. That is significant. So, we went with the 1 percent earned income tax that we're asking voters to consider.”
The Chronicle asked Superintendent Hall if the City of Bellefontaine’s recent tax abatements through the Community Investment Area (CRA) impacted the school district’s revenues.
“I'm really glad you asked that because that's one of those myths that's out there. First of all, the tax abatements, the school district did not give away millions of dollars in property taxes.
“In fact, that was something the city was able to do without asking the school district, without the Board of Education even having a vote in it. They can give 100 percent property tax abatements without asking the school district (in the case of a residential development. Schools districts can weigh in on commercial developments).
“If all of the people who purchased homes in the new developments were paying property tax, the district would not receive any additional dollars because all of our property tax issues that have been passed by our community are for a fixed amount.
“They don't collect more when there are more homes. We have one that was a substitute levy that allows us to collect a little bit more growth, but it amounts to about $25,000 annually.”
If the earned income tax levy doesn’t meet voter approval, Hall said the board would consider placing it on the May ballot.
“Since nearly 85 percent of our budget is personnel, we're going to have to make some significant decisions. If it doesn't pass in November, before the beginning of next school year, we were going to have to reduce by $1.6 million.
“And then by the beginning of that next school year, we would have to reduce by an additional $3.5 million.”
Concluding the interview, the superintendent weighed in, on a scale of 1 to 10, on the importance of the levy for the BCS’ financial future.
“This is a 10 because our reductions are going to continue from the state, our revenue is going to continue to drop, and this situation is just going to continue to get worse unless we do something about it now.
“So on a scale of one to 10, this is a 10.”
