MADISON TOWNSHIP — The Madison Local Schools Board of Education approved two resolutions Wednesday night to begin the process of putting a tax levy on the November ballot.
Those included:
- A resolution of necessity, the first step to putting a 1.5 percent earned income tax levy on the ballot.
- A resolution declaring an intent to cease collection of a 7.5 mill property tax levy if the income tax levy is approved.
If approved, the proposed earned income tax would replace the 7.5 mill property tax voters narrowly approved in 2023.
The new tax would only be on earned income. Social Security, pensions and other retirement benefits would not be taxed.
Treasurer Bradd Stevens clarified during the meeting that people who work at Madison Local Schools, but don’t live in the district, would not have to pay the income tax.
If approved, residents of the school district would have to pay regardless of whether their workplace is located inside or outside the district.
The proposed change is the result of Madison’s new taxation policy, which district officials said aims to minimize the impact on elderly residents with fixed incomes.
Supt. Rob Peterson, Stevens and the school board have spent the last few months working with financial consultant David Conley to develop the policy.
“At the state level, there’s a movement across the state to try to provide property tax relief to the elderly and retirees. That is a goal of ours,” Peterson said.
“It’s going to shift a little more burden onto our younger population and our working population, but those are the people who have kids or grandkids in school,” the superintendent said.
Board member Melissa Walker read a statement from board vice president Amy Walker, who was unable to attend the meeting.
I am excited that we are moving away from a philosophy that unfairly taxes property owners and towards a more just system based on one’s ability to pay, while giving relief to senior citizens on a fixed income.”
AMy walker, Madison Schools board vice president
In the statement, Walker said she regretted not being able to attend the meeting but firmly supported the policy and proposed tax changes.
“I am excited that we are moving away from a philosophy that unfairly taxes property owners and towards a more just system based on one’s ability to pay, while giving relief to senior citizens on a fixed income,” Walker wrote.
The new income tax would result in a $3.33 million in additional revenue for the district. The proposed income tax would generate $6.27 million annually, while the 2023 property tax that would be eliminated generates $2.94 million each year.
If approved by voters, collection of the 7.5 mill property tax would cease, effective Jan. 1, 2026. Collection of the income tax would begin in tax year 2026, with collection starting in 2027.
“I know nobody wants more taxes. I don’t, and I’m a resident of the district,” Peterson said. “However, in order to operate this district, we need an increase in funding to get our district to financial stability.”
New income tax, lower property tax part of district’s new taxation policy
Peterson and Stevens said they are recommending a rate of 1.5 percent because it would generate enough to put the district on solid financial footing.
The Government Finance Officers Association recommends public entities like school districts maintain a minimum cash reserve of 60 days worth of operating expenses.
Madison ended its recent fiscal year on June 30 with just two days’ worth of rainy day funds.
Stevens also said school district income tax rates have to be in quarter-percent increments.
“Ultimately our goal is to get to a 60-day cash balance which provides some financial stability for our district. It’s not exorbitant, but it puts you on pretty solid ground,” Peterson said. “The 1.5 percent was the lowest that could get us to that point.”
It’s going to shift a little more burden onto our younger population and our working population, but those are the people who have kids or grandkids in school.”
Supt. Rob Peterson
Peterson said even if the income levy passes, the district will need to continue making cuts. But he also emphasized the cost-saving measures the district has already made.
“We need to continue to look at our staffing. We’re going to need to look at our buildings to see if there is a way to be more efficient with the elementary buildings that we have,” he said.
“We’ve cut 41.5 staff positions over the last five years. The maximum raise we’ve given over the last two years is 2 percent, which is not exorbitant. Our beginning teachers salary for the 2025-2026 school year is $37,754 and we pick up part of their retirement contribution.”
Board renews contracts for Peterson, Stevens
The board of education also voted 4-0 to renew its top two administrators Wednesday night.
Both Supt. Rob Peterson and Treasurer Bradd Stevens were approved for three-year contracts commencing Aug. 1.
The board also accepted Peterson’s resignation and retirement effective at the end of the day on July 30. The formal resignation will allow Peterson to begin collecting retirement benefits.
Peterson’s contractual salary will be $117,250 in the first year. Stevens’ contract will be $105,000.
The board also met in executive session to discuss the employment of a public employee or official and to consider the purchase of property for the public purposes or the sale of property at competitive bidding.