MCSD Earned Income Tax explained | News, Sports, Jobs
With early voting underway in Ohio for the May 4 primary, registered voters who live within the geographic boundaries of the Marietta City Schools District are weighing the option of a different kind of tax than what was printed in November.
Last fall, voters did not approve a bond issue to allow the school district to build a new secondary campus behind Washington State Community College.
This spring, the ask is different.
“I know there’s some fatigue with the community over taxing the properties and so this is another way to generate revenue for the school district,” explained Superintendent Will Hampton. “This won’t impact our retired community. This is only for those who are working, who have completed a W-2 and live within the city school district.”
The ballot ask this spring is called an earned income tax levy, which would collect based off of what is reported to the state income tax system.
“The trigger is that number on the file that tells the state what school district you live within,” outlined MCS Board President Russ Garrison. “If you don’t live within the district, this won’t apply to you.”
The only similarity it shares with the operating levy, permanent improvement levy and emergency levy already contributing to the district’s coffers is that it is bound by the same geographic limitations as the property taxes.
This means that for those who work within the district, but live elsewhere in Washington County, or a surrounding county, they would not be contributing to the school levy if passed (differing from how the Marietta City Income Tax operates).
FUNDING
DIVERSITY
Traditionally a series of primarily property and public utility taxes have provided Ohio public schools with their primary revenue used to pay staff, keep the lights on, purchase equipment and curriculum.
The challenge with that funding scheme includes limits on millage, decreasing applicable millage and an inability to match rising costs of living.
But while the state legislature debates replacement of this form of property taxation ruled unconstitutional more than a decade ago, the present need persists to attract and retain talented and certified staff, to be competitive not only in terms of salary and wages, but also in terms of the physical, curricular and technological supports purchased to support that classroom environment.
“You can’t be competitive on compensation, if you’re not competitive on revenue,” said Garrison.
Enter stage left, diversifying revenue streams.
MCSD has on the May 4 primary ballot an earned income tax levy of 0.75 percent of a person’s wage or salary (multiply gross wage by 0.0075).
Where it is similar to property taxes is that if passed, it would only apply to those who live within the boundaries of the school district (which includes parts of Devola, Oak Grove, Reno and their corresponding townships) drawing on reported income earnings noted on a W-2, and self-employment earnings reported on Schedule C and Schedule E taxation forms.
For an individual who makes $7.25 per hour, five cents would be deducted per hour of work.
For an individual who makes $12 per hour, that equates to $7.20 removed from a two-week (at 40 hours per week) paycheck.
This, over the course of a year, equates to $187.20.
For an individual who earns $20 per hour (or a gross salary of $41,600 annually) the annual contribution to the schools would be $312 over the course of a calendar year, or approximately $0.85 per day.
If passed, the new earned income tax would not draw from the paychecks of individuals who work within the district but do not live within the district.
If passed, it would not draw from social security payments, pensions, capital gains, IRA withdrawals or dividends.
If passed, the new tax would include individuals who rent a residence within the school district, but do not at present directly contribute to the school district’s revenue without ownership of property.
See the Ohio Department of Taxation’s “Guide to Ohio School District Income Tax” pamphlet updated July 2019, for additional information including employer requirements to withhold, how farmers living within the district would be taxed, etc.
The guide also notes that “business do not pay the (school district income tax); only residents of the district are required to pay … Any income that a landowner receives for leasing mineral rights would be subject to state and federal income taxes.”
If passed, the levy is anticipated to generate approximately $3 million per year, bringing the per-pupil revenue close to what is afforded to Warren Local Schools students, but still below other districts in Washington County.
REACHING PARITY
“Eighty percent of what we spend goes to our employees,” explained Garrison. “That is impractical to change that percentage to go any higher, because we still have to turn on the lights, buy supplies.”
But even with an 80/20 split, what funds are available to spend within the district, in total revenue per pupil is not “on par” with what’s available to surrounding school districts of similar size.
“So, if you compare us to the 600 and some odd other districts in the state, right, the funding level that we are that we have for our staff and or for our kids, is in the bottom 15 percent of the state,” said Hampton.
ACCOUNTABILITY
See the weekend edition of the Times for more concerning state legislature debates on the Ohio School Report Cards and measuring achievements and struggles of public school districts.
STAFF CONTRACTS
While the school board and teachers’ union has already ratified the teacher contracts this year, up for a vote on Monday before the board is a contract with the district’s support staff equivalent.
The board meeting Monday is scheduled to be held in person, at Marietta High School in the cafeteria at 6 p.m.
Masks and social distancing are required.
Hampton noted that reassignment of administrative staff — including the announcements of principal shifts between remaining buildings following consolidation — will also be announced Monday.
Janelle Patterson may be reached at
If you go:
Early voting hours:
April 26-30: 8 a.m. – 7p.m.
May 1: 8 a.m. – 4 p.m.
May 2: 1 p.m. – 5 p.m.
May 3: 8 a.m. – 2 p.m.
Source: Ohio Secretary of State.
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