MADISON TOWNSHIP — There are two ways to get rid of a deficit: increase revenue or reduce expenses.
The Madison Local School District board of education voted on plans to do both during a brief special meeting Wednesday.
The board voted unanimously to finalize ballot language for a proposed earned income tax levy on the November ballot.
Treasurer Bradd Stevens called that “Plan A.”
“We’ve decreased expenditures. We’re continuing to decrease expenditures,” Stevens said. “We need to try to increase revenue.”
The board also voted on a Plan B — a precautionary deficit-reduction plan to submit to the Ohio Department of Education and Workforce.
While the plan isn’t binding (the school board would have to vote separately to implement the changes), district administrators said the proposed cuts will have to be made if the levy is not approved.
Proposed cost reduction measures in the ODEW plan include closing the Mifflin Elementary School building at the end of the 2025-2026 school year and bringing back pay-to-participate fees for sports and extracurriculars, starting in fall 2026.
If the plan is enacted in full, Stevens’ projections show Madison Local Schools would remain “in the black” through the 2027-2028 school year.
When crunching the numbers, Stevens wasn’t allowed to assume the passage of future levies — including the one set to appear on the November ballot.
Why does Madison need to reduce its operating deficit?
The district’s most recent five year forecast, completed in May, projected Madison Local Schools would have a negative cash balance of just over $1 million by the end of the 2026-2027 school year, if no changes are made.
School finance is complicated. District officials say flat funding from the state, inflation and increasing costs (including health insurance), declining enrollment and a misunderstanding about how much a previous levy would generate are all contributing factors.
Plan A: Replace $2.94M property tax levy with $6.27M earned income tax
Plan A is the aforementioned earned income tax levy. If passed in November, the five-year levy would generate approximately $6.27 million annually.
In a previous meeting, board members voted to approve a provision that would cease collection of a 7.5 mill property tax if the income tax levy is passed.
That 7.5 mill property tax was narrowly approved by voters in 2023. It generates approximately $2.94 million annually.
Thus, the district would see an overall revenue bump of approximately $3.33 million each year.
The earned income tax levy would not impact pensions, social security, retirement accounts, interest or dividends. Board members and district officials said the proposed change is part of an effort to reduce the tax burden on elderly and retired community members.
Peterson said the levy is “critically important” for establishing some financial stability for Madison Local Schools after the 2023 levy didn’t generate the expected amount of revenue.
“We really felt like the last time the increased revenue would be what we needed for financial stability,” Peterson said. “We were provided with some inaccurate information as to how much, how many dollars that would actually generate.”
Peterson said he, Stevens and the board have worked with consultant David Conley to establish a tax policy and plan for the district’s financial future.
“We believe we’ve done a better job researching it this time and planning,” he said.
“We’ve been thorough about ensuring that this is enough revenue to get us through for an ongoing period of time.”
Peterson and Stevens said that unlike property tax revenue, earned income tax revenue has the potential to grow with time.
Property taxes are typically based on a dollar amount and collection rates are adjusted (typically lowered) as property values change (typically increase).
But earned income tax is collected based on a percentage, so as wages grow, so does the collected amount.
Plan B: Close Mifflin Elementary School, institute pay-to-play fees
If the levy doesn’t pass, district officials said they’ll have to implement changes proposed in the ODEW plan.
Both the closure of Mifflin Elementary School and pay-to-participate fees were cost-saving measures considered by the district if the most recent property tax levy didn’t pass in 2023.
Peterson said he understands residents might be skeptical to see a levy on the ballot again. But he also said there aren’t many cuts left to make.
“Over the last five years, we’ve cut 41.5 positions. The raises that have been given have been limited to no more than 2 percent, so I feel like we’ve been frugal and good stewards of taxpayer money,” Peterson said.
“Our state funding has become flat, while the expense of everything continues to grow.”
Mifflin Elementary would close
The biggest cost savings from the plan include the closure of Mifflin Elementary, which had about 240 students enrolled in the last school year in kindergarten through fourth grade at 441 Reed Road.
According to the plan, that would lead to the elimination of 12 jobs: two custodians, an elementary principal, an elementary guidance counselor, four grade level teachers, an intervention specialist, a special education aid, a building aid and a library aid.
Additional cost savings from closing Mifflin include an estimated $20,172 annual contract for an elementary school nurse contract and an $35,472 in annual savings from utilities costs.
Peterson said if Mifflin closes, the district would move to grade level buildings. Madison South would become the district’s preschool through 2nd grade building; Eastview Elementary would house third and fourth grade.
“That’s really the only configuration that would work. We considered combining Mifflin and Eastview and maintaining the community schools,” he said. “There’s not enough room at Eastview to do that.”
He also noted Mifflin Elementary is the oldest of the three buildings. It was built in 1949; Eastview and Madison South were built in 1965.
Pay-to-participate fees would be instituted
The pay-to-participate fees would be $100 per student for their first activity, plus $50 per student for their second activity and no additional charges beyond the first two student activities.
Given the number of students participating in extracurricular activities, athletic director Doug Rickert estimated the pay-to-participate fees would generate approximately $50,000 per year, Stevens said.
“Mr. Rickert has looked at other schools that have implemented it, and that was the number that he came up with based on the revenues from other schools of similar size, and the difference and change after they went to pay-to-participate,” Stevens said.
The cuts outlined in the plan are projected to reduce district costs by $2,674,231 during the 2026-2027 school year.
Even if the levy does pass, Peterson said proposed cuts could still be up for discussion.
“I just don’t know that we’re in a position to say for sure right now if any of those might have to happen, even if the levy does pass,” Peterson said.
“With our declining enrollment and financial situation, it’s making more sense to go to two grade level buildings … That’ll be conversations that we need to have with the (school) board.”
The district has seen an enrollment decline of 287 students since 2019, according to the ODEW website.
