St. Marys City Schools Levy FAQs

Staff Writer

Listed below are FAQs about the St. Marys City School District's Earned Income Tax Levy, which will be on the May ballot. For more information, pick up a copy of the March 16 edition of The Evening Leader.

1. Why is new money needed? General Fund, PI or both?
The school district's five-year forecast shows expenditures exceeding revenues in the General Fund Operating budget. The increase in the funding will allow for SMCS to continually provide a high quality education. The cost to provide a quality education to all students continues to increase. Expenditures have increased because of unfunded state mandates, transportation, utilities, textbooks, technology, salaries, benefits, school safety, purchased services and overall inflation. This new money will support the General Fund operating expenses.

2. When was the last time that the school has asked for new operating funds?
In 2004, the school district's residents passed a 7.9 mill emergency operating levy that collects approximately $1.8 million per year. This has since been renewed in 2009, 2014 and will come up for renewal in 2019, but the money collected for the school remains flat.

3. Why can the money that was left over from building the school (LFI) be used?
It is illegal. The LFI funds can only be used for capital improvement expenses not operating expenses.

4. What is the breakdown of the current property tax that we are paying?
Current effective millage for the school district:
• General Funds: 20 mills
• Permanent Improvement: 1.316 mills
• Bond Fund: 6.5 mills
• Emergency Levy: 5.9 mills
Total Effective Millage: 33.716

5. My taxes are going up. Isn't that enough extra income for the schools to keep operating?
Even though your taxes have increased, the school district will only receive the flat amount originally voted on in 2004, which is approximately $1.8 million. Residential values increased about $11.7 million in 2017, but agricultural values fell by more than $10 million. The net $1.5 million increase is less than 1 percent in property value, which generated an approximately $30,000 increase in funding for the school.

6. Why does the cost of operating the schools keep going up?
Expenditures have increased because of unfunded state mandates, transportation, utilities, textbooks, technology, salaries, benefits, school safety, purchased services and overall inflation.

7. What is the General Fund used for? What is the biggest expenditure of the General Fund?
General Funds are primarily used for salaries, benefits, utilities and other operational expenditures of the district. The biggest expenditures for the district are salaries (55 percent) and benefits (22 percent).

8. What else is being done to get the budget balanced? Are there any cuts or cost-saving opportunities being planned?
The district can cut costs by reducing personnel and program cost, which can affect the quality of education for St. Marys students. This can be done by absorbing positions leaving the district and bringing outsourced services to the district at a lesser cost. The board and administration continue to look for operating efficiencies across the district; however, the cost of providing a quality education will not keep us out of deficit spending because as inflation increases, the revenues remain flat.

9. The number of kids attending St. Marys has stayed the same or decreased slightly over the last 20 years. Why do we have the same or more teachers?
In the past 15 years, St. Marys City Schools has made major reductions in its teaching staff (down 37 teachers) even in the face of state mandates that have required adding teaching personnel in certain spots. Further reductions would eliminate programs and offerings and increase the number of students in each classroom even higher. Cutting programs and increasing class sizes in schools will hinder the education quality for each student.
• Teachers 2001-02: 182
• Teachers 2004-05: 170
• Teachers 2011-12: 151
• Teachers 2017-18: 145

10. The school is at the 20-mill floor and my property value went up. Why didn't the schools' income go up?
The emergency millage voted in 2004 by SMCS residents only allows for a fixed dollar amount to be collected, which is $1.8 million.
11. Why is the school proposing to raise additional money through an income tax instead of a property tax?
The advantages are: More reflective of the ability to pay taxes and fairer tax based on a resident's income; generally benefits the senior citizens, businesses and farmers; and revenue can increase or decrease based on the economy.

12. What is meant by an Earned Income Tax?
An Earned Income Tax primarily taxes W-2 income or wages earned by the residents of the St. Marys school district. Retirement income such as pensions, Social Security and 401Ks will not pay for this levy. The taxes also excludes income from interest, dividends, capital gains, child support and estates. Property is not taxed. An individual will pay approximately 1.5 cents per dollar earned toward the school income tax.

13. How do I know how much this new tax will cost our family? What line on my W-2, tax return or paycheck stub will show me how much I will pay?
Primarily taxes Line 1 on the W-2 income or wages earned by the residents of the school district. An individual will pay approximately 1.5 cents per dollar earned toward the school income tax.

14. Will the income tax be deducted from my paycheck? What if I work in a different town?
Yes, this will be held from a paycheck based upon residency in the St. Marys school district, not employment location.

15. How will I pay the income tax if I am self-employed?
Self-employed individuals will generally make estimated payments to the state of Ohio.

16. Will I pay this income tax if I am retired?
Retirement income such as pensions, Social Security and 401Ks will not pay for this levy. The taxes also excludes income from interest, dividends, capital gains, child support and estates.

17. Will school operating funds be used to build the new athletic complex?
This Earned Income Tax is not to be used to fund the building of the new athletic complex and any other building projects.

18. Can other school district funds such as Permanent Improvement (PI), or Locally Funded Initiatives (LFI) be used to pay salaries and benefits?
No, it is illegal to transfer money from a PI or LFI into a general operating fund. It was voted in to cover capital projects not operating expenses. This explains why the district has money for improvements to its facilities but still needs to ask voters for operating funds.

19. Do other surrounding school districts have an income tax?
Yes, in fact, St. Marys is the only school district in Auglaize County that does not have an income tax for its school district. There are only two school districts in Mercer County that do not have an income tax. Both Celina and Wapakoneta have an income tax.

20. How does St. Marys City Schools rank with the 20 most similar districts in spending per pupil and performance?
St. Marys is first out of the 20 most similar districts (based on socio-economics) in the performance index rating. This is determined by the percentage of students reaching the different levels of performance on state testing. St. Marys is 13th out of the 20 most similar districts in per pupil spending (meaning 12 are spending more and seven are spending less on each student).

21. Can you name specific areas where the new funds will be used (ex: Books, computers, educational programs, utilities, salaries)?
General Funds are primarily used for salaries, benefits, utilities and other operational expenses that support educational programs.
General Funds also pay for transportation/bussing cost, College Credit Plus classes, FFA, music/band programs, art department, vocational education programs, athletic/extra-curricular programs, Auglaize Education Service Center programs for students with disabilities, paraprofessionals hired to assist students with learning disabilities, guidance/mental health department, school resource officer and other school safety trainings/programs, textbooks and other materials, technology infrastructure and devices. The biggest expenditures for the district are salaries (55 percent) and benefits (22 percent).

22. Can you name specific areas where the funds cannot be used for (ex: athletic field improvements)?
The General Fund can be used to support all other school district funds, but primarily the operating benefits are used for salaries, benefits, utilities and areas listed in question 21.

23. Can you explain where SMCS gets their funding to run the school and give examples of why that money doesn't stretch as far (ex: Student fees, property tax and state funding)?
The majority of the general operating funds used to run the schools come form state aid of approximately 53 percent and local taxes of approximately 47 percent. SMCS continues to stretch the general operating funds as long as possible, but while the revenue from the state and local taxes remain flat, the expenditures continue to increase because of inflation, unfunded state mandates, school safety requirements and more. When the expenditures exceed the revenue, the district asks the community for new money to support the education for St. Marys students.

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