by Walter D. GolladayIn January 2020, Social Security, federal and military retirees received a miserly 1.6 percent cost-of-living pension increase. In 11 years, our COLA reflects a cumulative increase of only 15.2%.
Rather than living with the financially harsh and punitive School Property Tax Levies Ohio residents have been subjected to for decades, retirees should be advised that in the State of Ohio there are two secondary income funding sources available to Ohio School Districts and voters.
I refer you to the Ohio Department of Taxation “Guide to Ohio’s School District Income Tax”. https://www.tax.ohio.gov/school_district_income.aspx
For retirees in the state of Ohio, there are two types of School District Income Taxes, one BAD, one GOOD.
The BAD Tax is a School District “traditional base tax”. The same tax retirees pay today to the state of Ohio. The BAD tax includes pension and retirement income. Today, approximately 144 Ohio School systems have implemented this voter approved tax. ORC 5748.021 allows a school district with a traditional base tax to go to the ballot to replace that tax with an earned income base tax.
The GOOD Tax is School District “earned income base tax”. On page 4 of the above mentioned Guide, it states that Earned Income Tax excludes such items as interest, dividends, capital gains and pensions. The City of Loveland utilizes this form of taxation on our retired pensions.
Today, approximately fifty-nine Ohio school systems have implemented this voter-approved tax. Earned Income taxes range from a low of one-quarter percent to a high of two percent.
Loveland voters should be aware that a school board can adopt only one School District Income base tax, not both. So earned income base tax is the solution for we retirees. ORC 5748.02 (E) prohibits a district from having school district income tax levies with both bases.
After the unsupported March 2020 Property Tax Levy is defeated, I would suggest the
Loveland City School District seriously consider, in their next proposed tax levy, a properly vetted and much lower combined school tax levy consisting of a property tax … AND … a earned income tax.
For the benefit of our many retired Loveland residents, the primary goal is to soften the financial impact on them every time our school district needs to acquire more funds to operate their many programs.
A secondary goal is to ensure the school district discusses in detail with our concerned and extremely knowledgeable residents and voters prior to the next tax levy being placed on the ballot. If a favorable response from the community is received then a combined lower property tax levy AND earned income base tax should be proposed.
Common sense indicates that Loveland School District would do well to garner residential voter endorsement, rather than opposition.
Walter D. Golladay is a resident of Loveland, Ohio
