+ What is the Sidney Schools levy?

On Tuesday, May 4, 2021, Sidney City Schools will be asking voters to approve, for ten years, a 0.75% income tax levy to generate $3.3 million for the district’s operation. In order to maintain student programs, educational services, instruction, and support at current levels, this levy must be supported.

+ What is taxed with an Earned Income Tax?

An earned income tax will only tax WORKING WAGES including W-2 compensation or self-employment income that is subject to the self-employment tax.

• Income that is not taxed includes
• retirement income
• Social Security income
• IRA distributions, pensions
• unemployment compensation
• workers compensation
• interest and dividends
• capital gains
• royalties
• profit from rental activities
• lottery winnings
• distributive shares of profit from corporations
• child support
• alimony received
• distributions from trusts and estates

+ Who will pay this tax?

Only residents within the district limits of Sidney City Schools will pay this earned income school district tax.

*This differs from city income tax.

+ How much will the 0.75% Earned Income Tax Levy generate to support district operations?

The 10-year, 0.75% Earned Income Tax will generate an estimated $3.3 million each year.

+ Why did the board choose an Earned Income Tax as the method for securing necessary, additional funding?

The Board of Education, Treasurer, and Superintendent critically analyzed the district’s financial standing and studied various options for balancing the budget.

Having failed the 7.3 Mill Emergency Levy multiple times in 2020, Sidney City Schools Board of Education and administration sought feedback to guide their decisions. After sharing a digital survey with the community, assessing the responses, and further discussing options with members of our community, the Board has reduced the amount it is asking for. It has also decided to ask the community to support a 0.75% Earned Income Tax instead of a property tax.

Based on the makeup of our community, the Earned Income Tax was the most fiscally responsible option for our taxpayers.

Ultimately, an income tax diversifies the school district’s revenue. Specifically, an Earned Income Tax will:

• fluctuate as a resident’s income goes up or down
• lessen the burden on senior citizens, many of whom are on a fixed income
• spread the tax amongst all who live in the district and earn income rather than just those who own property

School districts with either a traditional or earned income tax are demonstrating:

• Financial stability for longer periods
• Longer periods between operating levies
• Ability to maintain & grow their current programming
• Ability to adjust to the changing economy

Sidney City Schools is the only school district in Shelby County that does not have an existing income tax levy. All of the school districts in Shelby County have at least a 0.75% income tax levy, with many have 1% or more.

+ Why should I consider supporting the 0.75% Earned Income Tax Levy?

Simply, our expenses are exceeding our revenue and are causing the district’s carryover balance to quickly dwindle.

Inflation, school safety needs, state-mandated programs, special education, College Credit Plus, social and emotional wellness, other unfunded mandates, and changes in how schools are funded/school funding formulas have continued to tighten our budget and have led to the forecasted deficit spending pattern.

Additionally, our local revenue sources have essentially flatlined due to little economic growth.

The community kindly renewed an emergency levy in 2018 but it was not enough to completely offset the forecasted budget deficit, which is why we are asking for a new levy. Sidney City Schools has not received new money since 2009 (10 years). Additional funding is needed to ensure we can maintain the quality education our students need to succeed and that will help ensure our community remains strong.

The district has been deficit spending the past two years due to increasing expenses and reductions in state and federal funding.

• Sidney City Schools has not asked for additional operating revenue for more than 11 years, since 2009.
• Our property taxes from residential and agricultural properties for operations are at the legal minimum of 20 effective mills.
• The State of Ohio’s budget for 2019-2020 and 2020-2021 froze the funding for schools.
• The State of Ohio then cut funding for Sidney Schools by $646,286 last year due to the significant impact of the pandemic on the state’s economy.
• The district saw another reduction from the State of Ohio in the amount of $291,838 for the current school year.
• Sidney City Schools reduced salary expenditures in fiscal year 2020 but retirement/insurance benefits and purchased services continued to grow, outpacing the savings in salaries.

+ Why do school districts continue to ask for additional funding?

Levies, or voted mills, are the major source of revenue for most school districts in Ohio, but HB920 (a law enacted in 1976) basically freezes a district’s collection rate on voted millage. so when home values increase, a school district’s voted millage is reduced and the collection rate, also known as the effective rate, remains the same. Except for a one-time increase for new construction, school districts do not see increases in collections on their voted millage due to HB920. For school districts, simply keeping up with inflationary cost increases is challenging under HB920 and also the main reason most districts return to the taxpayers for additional revenue every few years.

+ What are the major reasons for the lack of future revenue growth?

• Lack of growth in state aid
• Lagging economic development
• Tax-abated commercial and industrial growth in the community

+ How much will supporting this levy cost me?

Each person will pay 0.75% (or .0075) of their EARNED income. Most individuals will see a deduction from their paycheck.

The median income for an individual living in the Sidney City School district is $33,452 (TY18).

(Chart to come)

+ How can the Earned Income Tax dollars be used?

An Earned Income Tax is flexible. It can be used for any type of district expenditure.

For Sidney City Schools, the Earned Income Tax will provide additional operating money. This money is needed to balance the budget, rebuild a cash balance, and pay for the necessary expenses of the district, including staffing, utilities, and supplies.

+ When was the last time the district received additional local funding?

The district has not had an increase in local money except for inside millage* since 2009. (see FULL FAQ glossary for more information about inside millage)

+ Doesn't remote learning save the district money?

Remote learning has not saved the district money, and in some ways, our expenses have increased to meet students remote learning needs.

• Though approximately 14% of our K-12 students are learning remotely, our staffing remains the same.
• Bus routes have remained fully intact despite a portion of students learning remotely.
• Our grade 5-12 teachers are teaching both in-person and online, sometimes simultaneously.
• We were able to secure grant money to help offset technology purchases to support in-person AND remote learning.

Sidney City Schools has also seen an increase in costs due to COVID-19, including personal protective equipment (PPE), increased cleaning and sanitizing, and food service.

+ What about the federal money the district received from the Coronavirus Aid, Relief, & Economic Security (CARES) Act?

Sidney City Schools did receive $652,607 in federal money from the CARES Act. While this money has helped offset the increased costs mentioned above, CARES Act money is restricted to be used toward COVID-related expenses. It cannot be used for staffing salaries/benefits or utilities. The CARES Act money does not offset the state budget cuts or reductions needed to stabilize our budget.

+ Why an Earned Income Tax over a Property Tax?

• An income tax diversifies our revenue streams.
• An earned income tax has an opportunity to grow in a good economy and as resident’s income goes up.
• It lessens the burden on senior citizens, many of whom are on a fixed income.

+ These are difficult times and many people have had to make sacrifices because of layoffs, furloghs, etc. What is Sidney City Schools doing to cut costs?

The district has stretched dollars as far as possible and made significant cuts recently without eroding educational quality, including

• 2019-2020 staff reductions through the reconfiguration of the schools totaling $1.26 million in savings annually
• 2020-2021 staff reductions totaling
• $1.95 million in savings annually
• 2021-2022 staff reductions totaling
• $2.1 million in savings annually

The total reductions and changes for school years 2019-20, 2020-21, and the upcoming 2021-22 result in savings of more than $5.3 million in annual expenses.

Additionally, the district has taken the following steps to lower expenses:

• Transitioning to a high deductible health plan only by calendar year 2022, saving the district premium costs each year.
• Procuring cost-saving contracts for energy, buses, equipment, and supplies through the Southwest Ohio Educational Purchasing Council, a purchasing co-op with other school districts
• Comparing prices from vendors to ensure we are taking advantage of the best prices
• Completing as many maintenance projects as possible which improve energy efficiency for long-term operating savings; by replacing maintenance staff with skilled professionals in HVAC, plumbing, and electrical trades, the district has contracted less with outside service providers.
• Shifting some programming costs to be paid with federal grant dollars, thus relieving the general fund even further.

+ My home value and taxes went up. Don't the schools get more money from that?

Property taxes in Ohio are governed by House Bill 920. Under HB920, tax rates reduce as values increase due to inflation in the school district. Because of this reduction, the school district receives the same tax revenues. Individual taxpayers may see their personal taxes go up or down but the district revenue remains approximately the same.

Every three years the value of taxable property in the school district is determined by the county auditor. If inflation has caused the value of the property to increase, the auditor cuts the school tax rate so schools do not receive more money. This is called the effective tax rate. As inflation drives up the value of a property, HB920 prevents schools from collecting more money. However, inflation drives up school costs and, because of HB920, school districts have no way to meet those cost increases caused by inflation.

+ How does Open Enrollment affect finances?

Open Enrollment allows a student to attend school (tuition-free) in a district other than the district where his or her parents reside. There are many pros and cons to this right which was instituted in 1993, although in the end, it is a financial liability for Sidney City Schools with over $6 million going to other schools.

The district saw a big jump in open enrollment out following the perilous financial times in the early 2000s, when the district, in order to save money, cut staff and instituted pay-to-play for extracurricular activities. Unfortunately, most of the many families who left during that time never came back.