Mentor school leaders recommend 4.9-mill levy as $2 million annual cuts and earned-income tax option spar over timing and impact

District finance staff told the Mentor Exempted Village Board of Education on Dec. 15 that the district’s current October forecast, revised since a county homestead "piggyback" change, leaves the district facing material shortfalls unless the board approves new revenue or sustained cuts.

The finance presenter reviewed the revenue mix and five-year outlook, saying the county’s decision to piggyback the homestead/owner-occupancy credit reduces district revenue by about $1.1 million this year and could cost roughly $2.2 million annually if repeated. “My recommendation is going to be 4.9,” the presenter said, recommending a traditional property tax levy as the more predictable option.

Why it matters: staff showed a scenario in which a proposed new levy that would raise roughly $6.8 million a year would still leave a first-year partial shortfall but stabilize finances in later years; absent new revenue the district could be at or below its policy floor by fiscal 2027 with a risk of negative cash in later years. Trustees were urged to pursue recurring savings of $2 million per year as a condition of any levy plan.

Details and options: staff presented two primary options for the board to weigh: - A 4.9-mill property tax levy, described by staff as a traditional approach that delivers faster, more predictable revenue timing and is familiar to voters. - An earned-income tax (presented as a 0.75% "earned income" option), which would apply to resident earners and generally not tax businesses or utilities. Staff said the income tax ramps up more slowly — often taking six quarters to fully collect — but grows with the economy and can grant different protections to taxpayers (for example, it does not count toward certain property-tax-based measures).

Staff cautioned both approaches carry tradeoffs: property tax is predictable and broad-based (including businesses and public utilities) but disproportionately affects homeowners and seniors; an earned-income tax can be more progressive and protect retirees but may produce revenue volatility tied to economic cycles and complicate relations with municipal income-tax authorities. Board members reported hesitation from city officials about an income-tax approach.

Cost-cutting and contingency planning: staff reiterated a plan to pursue $2 million in annual reductions across the next five years and listed deeper reductions the district would implement if levies fail, including: - Elimination or reduction of 11 additional certified positions and several classified positions in a “post-failure” scenario. - Postponement of capital projects including a $1,000,000 high-school gym floor/bleacher renovation. - Potential elimination of high-school transportation and expansion of walk zones, which staff warned would be disruptive and could not be undone mid-year. - Reductions in professional development, legal fees and selective program cuts; options to shift staff costs to ESE-funded grants where legally permissible.

Board questions and community impacts: trustees probed impacts on Concord Township, Mentor-on-the-Lake and residents who live across county lines, requested data on dual-income households and median household incomes, and weighed turnout differences between a May primary election and a November general election. Staff provided county turnout examples and said a May filing would require board action in January to meet statutory deadlines.

Process and next steps: staff reviewed statutory steps and deadlines for a May ballot placement and recommended the board consider a motion at the January organizational meeting followed by a special meeting to finalize the levy language and certifications. The presenter emphasized two board votes are required under state law and cited Ohio filing deadlines staff must meet to place an item in May.

Trustees did not take a final levy vote on Dec. 15. They approved one routine board business motion earlier in the meeting (approval of OSBA attendance), and adjourned after confirming a January timeline for further action.

Ending: board members agreed to follow up with staff on turnout data and dual-income household information ahead of the January meetings that will set whether a May levy will be pursued.