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EAST PALESTINE -- The East Palestine School District has officially moved forward with placing a 1 percent earned income tax levy on the Nov. 3 election ballot.
The board of education passed a resolution during a special meeting this month that places the issue on the ballot.
According to the resolution, the district is seeking the income tax levy because the current tax levy revenue raised is "insufficient to provide an adequate amount for the necessary requirements of the school district."
According to the five-year financial forecast presented by District Treasurer Rick Ellis in October, the bulk of the district's revenue comes from state funding (roughly $7.6 million as of 2025) while the bulk of the district's expenses are salaries and benefits (roughly more than $10.4 million in 2025).
Ellis noted in his report that the remainder of ESSER round three funds were used for salaries in 2025 resulting in a decrease of personal expenditures by about $400,000, however.
Like other expenses, employee retirement and insurance benefits have been on an upward trend for the district since at least fiscal year 2023, according to the financial forecast.
Employee benefits are provided through the Portage Area Insurance Consortium, which has averaged rate increases of about 5.6 percent over the last few years, while the rate increase for fiscal year 2025 was 10 percent and a rate increase of 10.2 percent for fiscal year 2026 was already set by the Consortium rate review committee, Ellis said in the report.
Certified staff have contributed 10 percent to the premium while classified staff contributed 6 percent.
As for other income sources, the next largest following state funding is through real estate and income taxes, which were at roughly $4.09 million combined as of 2025.
The new earned income tax levy would generate just over $1.8 million in revenue to the district annually for current expenses, according to the estimate provided to the district by the State Tax Commissioner.
The estimate was based on the property tax rate of 10.30 mills using 2024 valuation.
If approved by voters in November, the earned income tax will take effect Jan. 7, 2027 and run for a continuing period of time.
The new levy is being sought following the defeat of a five-year, 0.5 percent income tax renewal in the November 2025 election.
That levy was initially put before voters in 2020 and passed. Until its narrow defeat last year, the prior levy brought in $900,000 a year in revenue for the district.
The possibility of levies for district operations has been an ongoing discussion among the board for several years.
In fact, the levy put before voters in 2020 was one of the options recommended by the Ohio Auditor of State's office in response to the five-year financial forecast presented at that time.
Ellis said in the five-year financial forecast that the failure of the 0.5 percent levy renewal in 2025 would result in the district facing a nearly $3 million deficit by fiscal year 2029.