Kings Local treasurer outlines levy and earned-income tax options to steady district finances

Kings Local School District Treasurer Don Morrow told the school board on Monday that the district’s five-year forecast projects shrinking state aid and a structural gap between revenues and rising expenses, and presented three possible revenue options to stabilize finances.

Morrow said the district’s revenue picture includes the 02/2022 operating levy and roughly $7,000,000 in savings and efficiencies identified over the last three years. “One of the reasons that ... the trajectory of our finances are what they are is, our state funding's insufficient,” Morrow said, adding that the district is modeling a midline state-budget outcome that still reduces state dollars over the next two years: “we're projecting to actually get less this year than we got last year and then get less the year after that than we got that year.”

The options presented were: a “standard” operating property-tax levy (modeled at 6.9 mills, producing an estimated cost to homeowners of $20.13 per month for each $100,000 of home value); a larger ballot ask phased in over multiple years to extend the levy’s effective life; and an earned-income tax levied only on Kings residents, modeled at 1% on wages and compensation.

Morrow described the earned-income option as a longer runway if local wages grow. He said the county Department of Taxation’s publicly available income estimates dated to 2021 were outdated, so the administration adjusted the modeling by roughly 10% to approximate future incomes. He emphasized the tax would be limited to “earned income” — wages and compensation — and would not tax retirement income such as Social Security, pensions, capital gains or dividends under the modeled scenario.

Board members discussed trade-offs. A board member asked whether a 1% earned-income tax would provide a lasting benefit; Morrow replied, “Absolutely. It's a game changer,” and said his modeling used conservative assumptions and a five-year baseline. Superintendent Greg Sears stressed the district’s continued work with state legislators to seek additional funding but said those changes were not assured: “We're continuing to advocate for more state funding,” he said.

Morrow said a standard 6.9-mill property levy would keep the district near a roughly 60-day cash balance that staff and legislators consider lean but acceptable; the phased or larger levy would extend that runway without producing a large cash spike. The earned-income-tax scenario produced a steadier revenue stream in modeling because it grows with wages, whereas local property-tax revenue does not necessarily increase when home values rise, Morrow explained.

No formal board action was taken on a ballot plan during the meeting. Morrow said staff will refine scenarios and bring follow-up information to the board at the next meeting and in upcoming public sessions so the board and community can consider ballot timing and specific levy wording.

Why this matters: Kings Local is projecting lower state support while expenses rise and enrollment grows. Board members and staff framed a key question for voters and the community as whether to continue the district’s traditional property-tax levy approach, pursue a phased larger levy to delay future asks, or pursue an earned-income tax limited to district residents and earned wages.