LEXINGTON — More than 200 school districts in Ohio have an income tax.
Two Richland County school systems hope to join that list this year.
Voters in the Lexington Local School District will be asked to approve a 1.5 percent traditional income tax at the ballot box in May.
The new levy would take effect in 2027 and be continuous — meaning it would not expire or be up for renewal if passed. It will only tax residents living within the school district.
While taxpayers approved bond levies for new school buildings in 2018, this is the first time in nearly 15 years the district has asked taxpayers for new operating funds, officials said.
“It is important to clarify that construction funds and operating funds are legally separate and cannot be used interchangeably,” Treasurer Jason Whitesel said.
Operating dollars are only used for day-to-day expenses like payroll and benefits, academic programming, student transportation, utilities and building operations, technology and instructional materials and required student services like special education.
What would this levy cost residents?
The levy will be based on Ohio adjusted gross income, not property tax value.
Social Security, disability and survivor benefits are not included in Ohio AGI. Other types of retirement income like pensions and IRA distributions are taxed, though tax credits may reduce the amount retirees and senior citizens owe.
Residents can find their Ohio AGI on their most recent state tax return and estimate their tax liability by multiplying that number by 0.015.
Because the income tax is tied to earnings rather than property value, taxpayers will not see their amount owed increase due to changes in real estate market conditions or reappraisals by the Richland County Auditor.
Why an income tax?
Lexington is one of several area school districts that has re-examined its local revenue strategy in light of property tax reform efforts at the state level.
An income tax would also diversify the district’s revenue.
“We don’t know what else will come out of Columbus. If that constitutional amendment goes through and outlaws all property taxes, it’ll be a really challenging time,” said school board president Keith Stoner.
Lexington school board members and administrators developed a taxation policy last year during a series of workshops with financial consultant David Conley during public board meetings.
“The Board evaluated options and determined that incorporating an income-based funding source could provide a more stable and predictable funding structure, while reducing reliance on property taxes over time,” Supt. Jeremy Secrist said.
District leaders said an income tax levy would reduce reliance on property taxes, which would benefit retirees.
Whitesel said in December that more than 30 percent of Lexington school district residents are senior citizens living on Social Security or another form of fixed income. Many have seen sharp tax increases on properties they’ve owned for years, if not decades.
“If somebody were to lose their job, somebody takes a pay cut, somebody’s on a fixed income, a 1.5-percent (income tax) is a much fairer representation than a property tax that’s tied to their home that is now ballooned in value,” Whitesel explained.
District officials say the income tax would generate just over $9 million in annual operating revenue, providing increased funds while allowing the district to phase out some of its existing property tax levies.
One, a $2.7 million levy, will expire this year. District officials said they won’t put a renewal on the ballot if the income tax is approved.
That property tax costs the owner of a $100,000 home approximately $170 per year.
School leaders also said the board may vote to stop collection of a different $2.7 million property tax levy early, though it doesn’t expire until in 2034.
Why is Lexington seeking a new levy?
Officials say revenue from the levy is needed due to rising costs, increased student needs and recent actions by state and local lawmakers.
Ohio schools receive a large chunk of their funding from the state, which adjusts how districts are funded every two years with its biennial budget.
School officials across the state have said the most recent state budget, approved by lawmakers earlier this year, did not take into account the rising costs of educating students — resulting in a funding cut of nearly $2 million annually for the district.
Meanwhile, Richland County Commissioners also voted last fall to implement a property tax relief measure that reduced the school system’s annual collections by $279,558.09.
Lexington has operated in deficit spending since 2023
Lexington Local Schools has operated in deficit spending since the 2022-2023 school year. The district is projected to end the current school year with expenses exceeding revenues by $2,472,644, according to a five-year forecast conducted in February.
If the district does not succeed in passing new or replacement levies, Lexington is projected to run out of operating funds before the end of the 2027-2028 school year.
Due to those projections, the Ohio Department of Education and Workforce placed Lexington Local Schools under fiscal precaution and required the district to submit a deficit reduction plan in December.
Lexington isn’t alone. Madison Local and Mansfield City Schools have both had to submit deficit reduction plans in 2025.
The Lexington school board voted earlier this month to eliminate 24 jobs, mostly through attrition and retirement, for the 2026-2027 school year.
The list included 12 teachers, six administrative staff members and six classified staff, Secrist said.
If the levy fails, Secrist said deeper cuts will be necessary to keep the district afloat.
“There’ll be changes to fee structures for sure,” he said. “Then we’re going to have to go back to the drawing board and figure out what type of programming we have to cut, how deep we have to go with the personnel cuts in this next round, because we won’t have enough money to operate.”
