Sylvania Schools Treasurer Presents Levy and Income-Tax Options to Avert Projected FY29 Shortfall

Treasurer Adam presented a five-year forecast at the Sylvania Schools Board of Education special meeting on Nov. 3, 2025, saying the district's expenses are on track to outpace revenues and could push the fund balance into negative territory in fiscal year 2029 without new revenue. "We can't operate with a negative fund balance," Adam said, urging the board to consider options now rather than later.

Adam told the board that the district met its 90-day cash policy in fiscal year 2026 but that reserves are projected to dip below the policy in fiscal year 2027. He noted that the district cut $2 million from the general fund this year and has pursued cost-savings, including a $1.3 million energy-efficiency grant submitted to the state, but said internal reductions alone will not close the gap because roughly 86% of the budget is salaries and benefits.

The presentation explained how Ohio's House Bill 920 reduction factor limits the district's growth from voted property-tax millage after reappraisals; Treasurers' estimates show the district typically realizes about a 1% annual increase in property-tax dollars under current law. Adam contrasted that limited growth with income-tax options, which can grow with wages. He described two income-tax types available in Ohio: a traditional local income tax (broadly applied to residents' income with Social Security typically exempt) and an earned-income tax (generally W-2 and self-employment income, excluding most retirement income).

The treasurer presented three practical options for the board to consider: a 7.9-mill operating levy on the May 2026 ballot or, alternatively, either a 0.75% traditional income tax or a 1% earned-income tax. Adam said a successful 7.9-mill levy would begin collections on Jan. 1, 2027, and the district would receive roughly half the first year; the levy model in the presentation would keep the district above the 90-day reserve threshold through much of the forecasted period into 2031. He cautioned that income-tax collections take longer to ramp up (about six quarters per Department of Taxation estimates), meaning the district would continue deficit spending into fiscal year 2027 if the board chose an income-tax route, although modeled income-tax scenarios also extended reserves into the early 2030s.

Board members asked clarifying questions about the split between operating and permanent-improvement millage (Adam said the 7.9 mills would be all operating), how households and retirees would be affected, and whether businesses would be subject to a resident income tax (Adam said these types of income taxes apply to residents' income and do not directly impose a business gross-receipts tax on corporations located in the district). Adam emphasized community education would be necessary if the board places a novel tax type on the ballot because many current residents have not voted on a school levy in the last decade.

The treasurer said the latest date to adopt a final resolution for a May 2026 ballot is Feb. 4, 2026, and recommended the board take steps in December or January to allow time for legal review and public education. The board discussed scheduling possible special or regular meetings in December and January to meet the timeline.

Separately, the board approved several routine consent items by roll call. The board approved item 4.1 (licensed substitutes) and consent-agenda items 5.1 (classified new hires) and 5.2 (a classified termination). The board also approved items 6.1 through 6.4, which were supplemental positions and related activity contracts for 2025-26. Recorded votes for these consent motions were affirmative from board members who were polled by name during the meeting.

The treasurer and the board agreed to continue deliberations and public outreach on whether to place a measure on the May 2026 ballot and, if so, which revenue vehicle to propose. Any final decision and formal resolutions would need to meet the Feb. 4, 2026 deadline to appear on the May ballot.