MADISON TWP — Voters in the Madison Local School District will see a slightly different operating levy on the ballot Nov. 7.
After residents voted down an 8-mill continuing levy in May, the district’s board of education adjusted its proposal, putting a 7.5 mill, 5-year levy up for consideration.
If passed, the levy will generate approximately $3.36 million in annual operating revenue for the school district. Collection would begin in 2024.
According to Supt. Rob Peterson and the district’s levy committee, the new levy would cost the owner of a $100,000 house around $263 a year, or $5.07 per week.
“If the levy passes, we should be on pretty solid ground financially for awhile,” he said.
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If the levy doesn’t pass, the district will likely enact $4 million in cuts during the 2024-2025 school year.
In May, 58 percent of voters rejected the levy, according to the Richland County Board of Elections. Vote totals were 1,828 in favor and 1,347 against.
Peterson said a levy failure this time will lead to cuts including the elimination of 47 jobs, the closure of Mifflin Elementary School, a severe cutback in busing and the return of pay-to-participate for sports teams and clubs.
Madison school district voters haven’t passed a new operating levy since 1997. If the levy doesn’t pass, it will likely be back on the ballot in March 2024.
“If the levy doesn’t pass and we make these cuts, all we’re doing is kicking the can down the road another year,” Peterson said. “We have to pass a levy to get our district on track financially.”
Why did the levy millage and time frame change?
Peterson and school board President Tim Wigton said the board chose to change the timeframe of the levy based on feedback from the community.
“We heard from people that they would prefer to vote every five years on a levy so that they have more say, more control over how the finances are directed,” Wigton said. “It just gives them that kind of input that they wouldn’t necessarily have over a continuing levy.”
The levy is also half a mill less than before due to recent, countywide increases in property value.
Won’t schools get more revenue due to recent increases in property values?
Madison Treasurer Bradd Stevens said the district won’t experience a large boost in revenue from the property valuation changes. The school district will only see an increase in tax revenue from inside millage.
The Ohio Constitution guarantees a maximum 10 mills of unvoted property taxes, also known as inside millage, for each taxing district. This tax revenue is divided up between local school districts, townships and county governments.
The rest of a person’s property taxes are known as outside or voted millage.
Levies approved by voters after 1976 are subject to House Bill 920. This bill essentially “freezes” the amount that can be collected on outside millage to the dollar amount collected in its first year. So when property values go up, the millage is reduced so the tax revenue amount remains the same.
“The only money we’re going to collect an increase on is inside millage and new construction,” Stevens said. “We aren’t going to collect much more at all.”
According to Richland County Auditor Pat Dropsey, Madison Local Schools receives 4.4 mills from taxpayer’s inside millage. The total effective millage rate for residential taxpayers in 2023 is 31.82 mills.
“I know this is a horrible time to have to pass a levy after everybody’s properties have been re-evaluated. We have no control over that,” Wigton said.
“The school board is very concerned about having good schools for our kids. Our kids are worth it. We want them to have the best possible education that we can afford and we can provide for them. The sacrifices that (taxpayers) make will not go to waste.”
What are district finances like now?
Stevens said the school board considered various factors when setting the millage rate for the new levy, including increased property tax valuation and the increased funding from the state.
However, the increase in state funding is less than the district has been receiving in COVID-19 relief funds.
According to Stevens, expenditures have exceeded revenues for three of the last four years, even with COVID-19 relief funding from the federal government.
“Because expenditures are increasing at a higher rate than revenues, it will take at least 7.5 mills, along with some reasonable expenditure reductions, to maintain efficiency and recover from the past spending deficits,” he said.
Stevens projected that this fiscal year, expenditures will exceed revenues by about $1.84 million. The district began the fiscal year with a cash balance of $1.88 million. Ohio law does not allow school districts to go broke.
“We legally cannot end the fiscal year with a negative balance so our deficit spending cannot legally exceed $1.88 million,” Stevens said.
The treasurer also said this is the last year the district will receive COVID-19 relief funds.
“Last year, the district used $1.45 million in (COVID-19 relief) funds for salaries and benefits,” Stevens said. “Any expenditures those funds offset will either to have to come out of the general fund or those expenditures will need to be cut.”
