LEXINGTON — Treasurer Jason Whitesel mapped out financial possibilities for the Lexington school board Wednesday night.
Lexington Local Schools could end up on solid financial footing — or tumble off a financial cliff — in the next five to six years, Whitesel said.
It all hinges on what voters decide Nov. 3 when the district has two tax issues on the ballot.
One, a property tax renewal, would not increase taxes. The other is a new, 10-year, 0.75 percent earned income tax.
Whitesel said if voters approve both the renewal and the new income tax, the district will likely be on solid financial footing for the foreseeable future.
— If both ballot measures pass, Whitesel predicted the district would end the 2029-2030 school year with about $10.1 million in reserve.
— If only the renewal levy is approved by voters, Whitesel said Lexington will be OK in the short term. But by 2030, cash reserves would likely dwindle to around $346,552 — half of what the district needs to make a single payroll.
— If neither gets approved, Lexington Local Schools would be in dire straits, the treasurer said.
“Without a renewal or an earned income tax, we’re looking at an unreserved cash balance at the end of (fiscal year) 2030 of negative $9 million — insolvency, state takeover,” the treasurer said.
Slides shared by Lexington Local Schools Treasurer Jason Whitesel during a school board meeting Wednesday. 
Slides shared by Lexington Local Schools Treasurer Jason Whitesel during a school board meeting Wednesday. 
Slides shared by Lexington Local Schools Treasurer Jason Whitesel during a school board meeting Wednesday. 
Slides shared by Lexington Local Schools Treasurer Jason Whitesel during a school board meeting Wednesday. 
Slides shared by Lexington Local Schools Treasurer Jason Whitesel during a school board meeting Wednesday.
Lexington’s revenues have steadily declined since the 2023-2024 school year, but school officials said costs continue to rise.
The result has been years of deficit spending, with the gap growing wider each year.
Even after eliminating 24 jobs last spring, Whitesel projected the district will spend almost $1.78 million more than it takes in this school year.
Across Richland County, school officials have cited state funding cuts and rising health insurance costs as financial drains.
Lexington is no exception.
How did we get here?
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.
Meanwhile, Richland County Commissioners voted last fall to implement a property tax relief measure that reduced Lexington’s annual collections by $279,558.09.
“We’ve been trying to advocate for our community for well over a year now — writing letters, sending emails, talking to those in Columbus about the impact this is going to have directly on the students in the community of Lexington,” Whitesel said.
“We’re not the only ones. This is, throughout the state, what districts are facing because of decisions that have been made.”
Whitesel said most of the funds being used to build a new elementary school are coming directly from the Ohio Facilities Construction Commission, a state government entity. Those funds can only be used for the new building project.
The district used its share of local building levy funds to construct the new junior high and high school building after a delay in accessing those state funds.
How much would the levies generate?
If approved, the property tax will continue to generate around $2.68 million in annual operating funds for the next five years.
Whitesel said initial estimates project the new income tax would generate about $3.5 million in additional operating funds during its first year.
Voters overwhelmingly rejected a continuous, 1.5-percent traditional income tax levy in May.
“The positive out of May is we got a lot of feedback, and the feedback was our community does not like a traditional income tax, which taxes retirement, taxes capital gains, taxes earnings on investments,” Whitesel said.
The proposed income tax in November would expire after ten years. It would also be an earned income tax, rather than a traditional income tax.
That means residents would only pay taxes on earned income like wages, salaries and other compensation and net earnings from self-employment. Other compensation and net earnings from self-employment would be taxed only to the extent the income is included in one’s modified adjusted gross income.
The tax would not apply to Social Security, retirement pensions, alimony, child support, unemployment and workers’ compensation, welfare benefits and disability benefits.
Capital gains, interests, dividends, trust distributions and profit from rental activities would also excluded from the tax.
