ASHLAND — As Ashland County’s resident education reporter, one topic has crept up on me over and over: school levies.
Since I arrived at Ashland Source in July 2023, I’ve covered attempts to garner support for an income tax levy in Mapleton; a bond issue and property tax levy in Loudonville; renewal levies in Hillsdale; and Ashland City Schools has pledged to put a renewal of its permanent improvement levy on the ballot this year.
In short — it’s been a lot of school districts asking taxpayers to approve funding, for several different reasons.
These levy attempts have also garnered several questions from county residents. I’ve had voters in each of these districts reach out, asking me about the tax issues on the ballot, or to clarify how the process works.
That’s the kicker with tax issues: They can be really confusing to untangle.
So, I called Cindy Funk, our county auditor. She answered several questions about school tax issues.
What is the process to put a tax levy on the ballot?
When a school district places a tax levy on the ballot, it must follow the Ohio Revised Code, Funk said.
The ORC states a board of education can declare by resolution a levy is necessary for a number of reasons.
If a board passes a resolution saying the levy is necessary, it must certify a copy of the resolution to the tax commissioner and county auditor.
Then, the tax commissioner and county auditor must certify the rates and average annual property tax rate to pay debt charges on bonds, respectively.
Funk said, in short, her job with certification is to tell school districts how much revenue will be generated by the real estate levy rate for which they are asking.
Once the tax commissioner and county auditor certify rates, the school board passes another resolution declaring the rates and submitting the ask to the electors. That’s when voters have a chance to weigh in, and either approve or vote down a levy ask.
If voters approve a bond issue, for example, Funk said they’ve approved borrowing money to build the school.
Once the issue is approved, for her office, it’s a matter of calculating the bond’s rate each year. That rate is calculated based on what the value, principle and interest payment are for that year.
But that rate isn’t always constant, so the burden may be more or less on the taxpayers from year to year, Funk said.
Why do schools place tax issues on the ballot? What kinds of tax levies are there?
According to Funk, schools place tax issues on the ballot for several different reasons.
Sometimes, it’s because their revenue has decreased; other times, it’s because their expenses have increased. Either way, they may need additional revenue for their general fund.
Schools can make an ask for that in the form of an income tax, like Mapleton tried to do in 2022 and 2023. Its most recent ask, a 0.75% income tax levy, would’ve generated around $1 million annually.
Funk also said schools can ask for revenue for a specific purpose, like upkeep of buildings and school buses. That ask typically comes in the form of a permanent improvement levy.
In Ashland County, voters passed a permanent improvement levy for Loudonville-Perrysville Exempted Village Schools last spring. It was a renewal — which means voters had previously approved the tax for a limited time. The district asked voters to reapprove it for another limited time period of five years.
Ashland City Schools Supt. Steve Paramore also announced in his State of the Schools address that his district plans to seek a renewal of its permanent improvement levy in November. The board has yet to pass any resolutions related to that renewal.
Funk said schools can also ask taxpayers to pay for the cost of a new building. That typically comes in the form of a bond issue, which lasts for around a 30-year period. Bond issues can also be combined with property tax levies or income tax levies, or both.
Loudonville-Perrysville Schools attempted to pass a bond issue in November for a new pre-K-12 building. It’s placing a new bond issue and income tax levy on the ballot in May, again in the hopes of building a new school.
There are other types of school tax levies districts might ask voters to approve. The fact sheet below outlines other types of levies.
If voters approve a levy, who collects the tax?
If voters approve an income tax levy, that tax is collected by the Ohio Department of Taxation. It can be paid quarterly or annually, according to Funk. She said typically, when you file your state income tax, you also would file your school income tax.
“If you haven’t paid enough at that time, then that’s when you would pay,” Funk said.
The process is different for property taxes, Funk said. Those include permanent improvement levies, emergency levies and more.
For property taxes, Funk said the county treasurer’s office generates those bills and sends them out. According to the fact sheet from the Ohio School Boards Association, those taxes are paid in January and July of the “calendar year following the tax year for which the taxes are levied.”
School districts’ fiscal years typically go from July 1 to June 30.
How do schools receive the money from levies?
Funk said with property taxes, once taxpayers pay their bills, the money is disbursed to the schools. It goes in the appropriate board funds.
So, for example, if a district has a permanent improvement levy, the money collected from that tax goes into their PI fund. Or, if a district passed a bond issue, the money collected to pay off the bonds goes into a bond fund.
“When they’re audited… they have to verify that those bond funds were paid to make the payment,” Funk said.
“Same way with PI funds. When you’re audited, because everyone’s audited by the state auditor’s office, they verify that those PI funds or bond funds… go into the specific funds and are spent appropriately.”
