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Branch to ask voters for tax

BELOIT — The West Branch school board is asking residents to pass an income tax on the November ballot to avoid an operating deficit.

The board on Monday unanimously approved a resolution to proceed with a five-year, .5 percent earned income tax that will generate enough money to avoid an $850,000 operational deficit projected in Fiscal Year 2018.

The earned income tax does not affect real estate taxes within in the district. It will tax wages, salaries, tips and other employee compensation in addition to net earning from self-employment.

It does not affect income such as retirement, unemployment, worker’s compensation, lottery winnings, interest, dividends, capital gains, profit from rental activities, distributive shares of profit from S corporations, alimony and received distributions from trusts and estates.

If approved, the income tax would take effect Jan. 1.

A press release issued by Superintendent Timothy Saxton, residents who are retired and receiving no earned income from an employer, and are not self employed and have no depreciable property do not have to pay the school income tax.

“West Branch has conservatively approached this problem over the past 20 years,” Saxton said. “In the last two years the district has reduced 16 positions, shifted responsibilities and eliminated programming. There is a strong sense of pride in this school community. It’s time to invest in the continued progress of the students who attend this district.

“As always, voters who invest in their communities see results over time in many areas. We have had considerable discussion and research with members of our school board and community in deciding to put a levy on the ballot. The final decision involved the fact that an earned income tax will only tax W-2 compensation and self-employment compensation, while not taxing retirement income, social security, pensions, interest, dividends, unemployment, worker’s compensation or alimony payments.”

Board President Lori McLaughlin said the board decided on the earned income tax instead of a property tax in response to feedback from a community meeting last month. The board also did not pursue a security/safety levy since the funds generated by such would be limited to security/safety.

The board in June approved a resolution of necessity for two different levies — a property tax and an earned income tax — and forwarded them to the Mahoning County Auditor’s Office to certify the millage (property) and percentage (income) to raise the $850,000. The property tax needed to generate $850,000 would have been 3.34 mills.

The board is seeking a tax due to a projected cash balance deficit in the near future. The most recent five-year financial forecast shows a growing deficit spending that projects to a cash balance deficit of nearly $663,000 in the fourth year and over $2.5 million in the final one.

The first committee meeting is scheduled for 6 p.m. Aug. 13 in the high school library. Anyone wishing to help with the issue is welcome.

khowell@salemnews.net

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