Westerville board urges district residents to weigh in as state budget and 'inside mills' debate pushes district toward possible income tax question

The Westerville City Schools Board of Education on June 23 discussed state-level budget negotiations and approved two resolutions asking the Ohio Department of Taxation to certify alternative earned-income tax rates — 0.75% and 1.25% — while also authorizing a statement opposing House Bill 335 and related provisions.

The resolutions came as Superintendent Hamburg told the board that state funding language was active in the conference committee and that the district expects the final conference report "very soon." The resolutions ask the Department of Taxation to certify estimated revenue for possible ballot measures so the district can move quickly if required.

Why it matters: Board members said the proposals in the legislature — particularly language that would eliminate the state-allocated unvoted "inside" mills — could remove about $16.3 million a year in automatic property-tax revenue the district currently receives. Treasurer Nicole Marshall warned that uncertainty in state tables had already reduced the district's earned-income estimates, and the board approved filing for two different earned-income rates to preserve options.

Treasurer Nicole Marshall presented the district's estimate for the income-tax certification and the practical tax impacts. Marshall said, "I'm estimating a 0.75 rate... generate $24,297,281" and later said the 1.25% rate would "generate $40,628,608." She gave examples of taxpayer impact: at a $50,000 modified adjusted gross income, a 0.75% income tax would amount to about $375; using the district median federal adjusted gross income of $59,789, the treasurer estimated a $0.75 rate would be about $448.

Board members repeatedly urged residents to contact members of the budget conference committee and the governor's office. Superintendent Hamburg and several board members said the legislature's proposals so far offered little relief for districts that already consider themselves underfunded. The board approved sending a formal opposition communication regarding House Bill 335 and a separate resolution requesting certification of alternative tax rates for possible placement on the ballot.

The board discussed how earned-income taxes differ from municipal income taxes: school-district income taxes apply only to residents of the school district and are based on Ohio modified adjusted gross income (W-2 wages and net self-employment income), not on retirement income, interest, dividends or wages earned by nonresidents who work inside the district.

Public comment on state policy included resident Tom Curley, who said, "I strongly support you in opposing," referring to proposed state changes that would affect local school funding.

The board voted to approve both certification resolutions and the opposition communication. The motions passed with unanimous recorded support from members present and the board indicated it would reconvene in July to decide which, if either, levy to advance to the ballot depending on developments in the state budget.

The board noted that if the legislature removes inside mills, many local governments would face similar revenue losses and that the district's choices about local levies would be part of a broader, statewide policy discussion.

Looking ahead: Board members said they expect to return in July with more specific levy planning, and they urged residents to contact conference-committee members and the governor while negotiations continue.