LEXINGTON — Residents of the Lexington Local school district will vote on two school levies in November. Only one would raise taxes.
The board voted Wednesday to begin the process of putting a new, 0.75-percent earned income tax before voters, as well as a property tax renewal.
Voters overwhelmingly rejected a continuous, 1.5-percent traditional income tax levy in May.
But district leaders say the financial conditions that prompted that levy request haven’t changed.
“When the state cuts your funding, you can’t then cut your way out of that,” Supt. Jeremy Secrist said. “You just can’t cut enough to get to that point.”
Lexington has made cuts. The district eliminated 24 jobs in April — most of them by not replacing outgoing or retiring personnel.
Ten-year income tax proposal would not impact retirement income
Board president Keith Stoner said the new income tax proposal takes feedback from the public into account.
“We really have tried to listen,” he said. “We’re coming back with an income tax solution, which gives more stability to the district finances, but we’re doing it in a way that hopefully will be easier on our retired residents.”
The income tax proposal would be collected for 10 years and would be an earned income tax rather than a traditional one.
Unlike traditional income taxes, earned income taxes exempt retirement income, capital gains, dividends or interest earnings. They also don’t tax benefits like unemployment, alimony or child support.
Whitesel said initial estimates project the earned income tax would generate approximately $3.5 million in additional operating funds each year.
The property tax renewal would not raise taxes or result in added revenue for the district.
It would continue collection of an existing tax levy, currently set at 4.8 mills, for an additional five years. It generates about $2.68 million in annual operating revenue for the district.
Board approves pay-to-participate fees
The board also voted to approve pay-to-participate fees, which will take effect in the 2026-2027 school year.
Those fees include a pay to participate fee of $100 for each high school sport and marching band, $50 for each junior high sport and marching band, and a $50 technology instruction fee for all students, kindergarten through 12th grade.
Secrist said all student-athletes and band members will have to pay participation fees, regardless of income. Technology fees will be waived or reduced for students who qualify for free or reduced lunch based on their household income.
Board member Rob Schuster asked if the participation fees would cover the cost incurred by the district for sports.
“No, but it’s a start,” Secrist said. “It’s not going to get to where the county commissioners cut us, but it’s a start.”
Richland County Commissioners recently voted to continue a 2.5 percent tax relief measure for owner-occupied properties, saving the taxpayers of Richland County around $1.7 million dollars.
But those tax cuts directly impact school districts. Lexington took the biggest hit at a loss of nearly $280,000 per year.
Whitesel said it’s hard to know for sure how much the fees will generate, but it will likely be somewhere between $200,000 and $250,000 a year.
Secrist said it could be necessary to increase the fees in the future if the November levies don’t pass.
“The bottom line is, our athletic fund does not take care of transportation costs or coaching costs and our general fund cannot continue to subsidize those costs anymore,” Secrist said.
“Same with the technology fee. We’re a one-to-one district, but we have subsidized that ourselves, and we cannot continue to do that.”
Stoner said student access to sports was a consideration in approving the fees.
“I don’t think any of us would ever want to do something that keeps anybody from participating,” Stoner said. “But we have fiscal realities, we have to do what we have, what is in the best interest of the entire school district right now.”
Lexington will end its fiscal year with less than 90 days’ cash on hand
Lexington’s most recent five-year forecast, completed by Whitesel in February, projects the district will maintain a positive fund balance through the 2028-29 school year.
But it also shows Lexington has operated in deficit spending since 2023 and, without additional revenue, will continue to do so.
Whitesel projected Lexington will end the next two school years with deficits exceeding $2 million each year.
The Ohio Department of Education and Workforce put Lexington schools under fiscal oversight as a result. The board was required to submit a deficit-reduction plan late last year.
That plan included pay-to-participate fees and the staff cuts approved earlier in the year.
Whitesel said he believes Lexington will end this fiscal year on June 30 with between 75 and 82 days of cash on hand for operating expenses.
The Ohio Association of School Business Officials recommends a 90-day reserve.
