Parma leaders outline plan to phase out property levies and seek 1.75% school-district income tax
Summary
District staff proposed phasing out three renewal property levies and placing a 1.75% school-district earned-income tax on the May 2026 ballot to provide property-tax relief and replace revenue; trustees pressed for specific cost‑savings plans and scheduled a special meeting to continue work.
District leadership presented a three-part proposal aimed at stabilizing finances while providing property-tax relief to homeowners in the Parma City School District.
Dr. Cruz reviewed the district’s levy history and told trustees that renewal levies have historically passed while requests for new property-tax money have repeatedly failed. To respond, staff proposed: (1) phasing out collection on three existing renewal levies (approximately $40.5 million annually in currently collected property-tax revenue), (2) placing a 1.75% school-district earned-income tax (SDIT) before voters in May 2026, and (3) pursuing cost-saving and budget realignment measures across the district.
Dr. Cruz said the SDIT would apply only to residents’ earned income and not to non‑earned income such as pensions or Social Security; the Ohio Department of Taxation would collect the tax via employer withholding and returns. He explained phased implementation: the district would retain one of the three renewals in the first year while SDIT collections ramp up, then stop collecting the remaining two levies in subsequent years to avoid an immediate fiscal hole. The presentation included an example: roughly $175 per $10,000 of earned income would be attributable to a 1.75% rate.
Trustees asked for numerical projections, clarity on the timing of loss of property-tax revenue versus SDIT collections (first-year collections are expected to be limited while withholdings and returns ramp up), and whether the district can protect against revenue declines from higher unemployment or other economic changes. Treasurer Mr. Nucio and Dr. Cruz said first-year SDIT collections would be limited (they estimated only a small percentage initially because employers and taxpayers need time to withhold and report) and that the board plans to stagger the levy phase-out to avoid a cash shortfall. Staff also emphasized that the district must pair revenue changes with cost-savings—reviewing budgets, staffing, attrition and program viability—to remain solvent.
Several trustees said they would not support a ballot package without more detailed cost-savings plans. Trustee Ashley McTaggart pressed for committee review and timely data, saying she wanted to "speak intelligently" about the tax budget and any proposed reductions. Dr. Cruz and the treasurer said budget and staffing work largely unfolds in the spring and that specific staffing and program decisions would emerge during the normal budget and staffing season; they committed to bringing more detailed analyses back to the board.
Before the meeting adjourned the board scheduled a special work session (next Wednesday at 6:00 p.m.) to continue the levy-conversation and to prepare the two resolutions required in January (a resolution of necessity and a resolution to proceed) if the board votes to place the SDIT on the ballot.
What happens next: staff will publish notice and draft resolution language for the special meeting; trustees requested more transparent, committee-level briefings and community-facing outreach explaining what the SDIT would mean for homeowners and renters.
