Board examines income-tax alternatives — traditional vs. earned — but conversion not feasible this year

District staff spent part of the June 4 work session explaining income-tax alternatives, how they differ from property levies and why conversion to an earned-income base would take time and additional steps.

Presenters said Perrysburg currently collects a 0.5% traditional local income tax and described the traditional base (wages, interest, dividends, pension income, social security as applicable) versus an earned-income tax, which covers wages, salaries and net self-employment income but excludes dividends, interest and many other nonwage items. Staff noted that an earned-income base typically produces a smaller tax base, so the percentage required to generate an equivalent dollar amount is higher. "If we convert a 0.5% traditional income tax to an earned income tax," a staff presenter said, "you'd likely need to put 0.75% or a higher quarter-percent increment on the ballot to achieve equivalent revenue."

Staff explained the procedural and timing constraints: a conversion (replace existing traditional with an earned-income tax at an equivalent or higher rate) is possible but requires a ballot question to replace the existing levy; if the district wanted both a converted levy and an additional earned-income levy, that would take multiple ballot steps and cannot be completed in a single November cycle. The district is awaiting formal certification from the Ohio Department of Taxation to get precise estimates for earned-income equivalents; staff said past conversions have resulted in higher percentage demands (for example, a half-percent traditional tax once equated to roughly three-quarters of a percent on an earned-income base in prior analyses).

Staff also noted timing differences: property levies take effect on Jan. 1 following a November election and generate collections on a predictable schedule; income taxes are collected on a calendar-year basis and often ramp up as withholdings and annual filings, so revenue does not arrive as immediately as property-tax collections in the first year.

Data point: staff cited the CUP report (Ohio Department of Education and Workforce) showing an average Perrysburg filer income of $118,315.75 in tax year 2022; staff said the Department of Taxation uses federal-return aggregates to certify expected yields and that the district has requested that certification.

Ending: Board members acknowledged the income-tax discussion as a longer-term strategic option but told staff an earned-income conversion is not a feasible short-term fix for the district’s immediate cash needs. Staff will pursue Department of Taxation certification and include income-tax scenarios in future planning.