Greater Medina Chamber of Commerce
Recommendation on Earned Income Tax Levy for Medina City Schools
September 15, 2011
The Greater Medina Chamber of Commerce Board of Directors (“Board”) recommends that the residents of the Medina City School District vote in favor of the Earned Income Tax Levy that the District placed on the November ballot. The Board recognizes the critical importance of having an excellent school district. An excellent school district contributes to economic development, quality of life and increased employment opportunities for a community. The Chamber has stayed involved in school funding matters, has continued to communicate with local business and community leaders and spent extensive time reviewing the School’s budget projections and future funding needs.
The Board of Education has voted to place a one-half percent Earned Income Tax Levy on the November 2011 ballot. The levy would tax only those residents of the Medina City School District having salary/tip/wage income (reported on Form W-2) and self-employment income subject to Social Security and Medicare tax. The levy would not tax retirement income and Social Security income. The Earned Income Tax Levy would be a new source of revenue for the School District and assist the School District in diversifying its income beyond the traditional real estate tax base. When quantified, the earned income tax levy request is expected to raise revenue approximating the same amount as a 3.9 mill property tax. The levy amount will maintain the existing status of the Medina City School District. A successful levy will not reinstate the programs or rehire teachers and staff that have been reduced over the past 18 months.
In February 2010, the Chamber Board published a position and recommendation paper for the Medina City Schools in connection with student population growth, school funding and operating expenses. In order to control future budget deficits, the Chamber recommended the Medina City Teachers Association enter into salary and healthcare benefits negotiations that would recognize the current economy and State of Ohio funding conditions. The Chamber also stated that an additional future operating levy was still needed to fund the growing student population, a levy in the range of 3 to 4 mils would likely be needed.
Over the past eighteen months, the Medina City Schools Board of Education (“Board of Education”) has instituted teaching, support staff, and administrative cuts of approximately twenty percent from prior staffing levels. The cuts have resulted in substantial program and services reductions that have dramatically reshaped the Medina City School District and eliminated many student opportunities.
As a part of the new teacher contract, the Medina City Teachers Association (MCTA) has approved a salary freeze for all salary levels through June 30, 2012. The contract also includes a substantial increase in the employee share of healthcare costs. The District’s administrative staff had previously agreed to salary freezes (past 3 years) and increased healthcare contributions. These recent changes may result in as much as $2 million in savings to the School District. When coupled with concessions given last July by the Medina City Teachers Association, as much as $3 million in savings could be realized. Because of the current financial condition of the School District, the current contract was negotiated by the Board of Education with MCTA for one year. Ohio law does not permit contracts such as these to extend into years where there is a projected deficit situation. Therefore, the Board of Education and the Medina City Teachers Association will again enter into negotiations in early 2012.
The Chamber recognizes that there will be future funding needs for the Medina City School District because of continued student population growth, reductions in funding from the state of Ohio, and limited and slow economic growth at the State level. However, the Chamber encourages the Board of Education and Medina City Teachers Association to continue to work towards a sustainable operating solution that recognizes the continued economic stresses our businesses and community members face.