By: Amy Wendt
THE VILLAGE REPORTER
amy@thevillagereporter.com
The Archbold School Board gathered in the high school Media Center on Wednesday, August 6, for a special financial work session with board members, Gina Benecke, Karen Beck, Skeat Hug, Jeremy Hurst, and Tyson Stuckey in attendance. Superintendent Jayson Selgo and Treasurer Joyce Kinsman rounded out the group.
During the session with David Conley of Rockmill Financial Consulting, school officials received updates on the state budget and pending legislation, reviewed funding goals, and began exploring options to include in a taxation policy to be developed in the upcoming months.
Aside from strengthening the district’s financial health, the goal of a taxation policy is also to reduce the tax burden on any one demographic, including older residents, generate revenue that grows over time, move away from relying on temporary levies, and maintain the minimum 20-mill tax floor.
“This is this is sort of the last session before we move to the part of the session when we start to write the policy – kind of based on what we have learned about the community, what we think makes sense for the community going forward, and also what we think we understand from what’s happening in Columbus right now, which is really chaotic,” Conley began.
Recent state legislative actions have put Archbold, along with many other school districts, in a position where funding challenges could impact basic operations.
With two emergency property tax levies currently on the books, along with the district’s constitutionally guaranteed inside millage, the district relies on property taxes for 26.55% of its General Fund, of which 37.87% comes from businesses.
Ongoing proposals to eliminate certain property taxes emphasize the importance of exploring new revenue sources that can grow over time.
Conley provided a brief overview of where proposed legislation currently stands at the state level, noting that Governor DeWine vetoed all major law changes that would impact school tax structures in the Biennial Budget Bill that was signed into law on June 30.
He added that as of the time of this writing, the House voted to overturn the Governor’s veto for calling for the elimination of emergency, substitute, and replacement levies, and the Senate has yet to vote.
To date, the status of the 20-mill floor remains the same. State law mandates that every Ohio school district collect a minimum of 20 mills in property taxes for operating costs. This baseline cannot be reduced, even if property values rise.
Since 1984, residential and agricultural values have experienced an average annual increase of 4.85% despite a temporary downturn in 2011. This 20-mill floor creates compounded property tax costs to residents as values continue to increase over time.
Conley layed out several options to replace the district’s current emergency levies, including: replacement with a “Current Expense” levy; implementing a traditional income tax; adopting an earned income tax; combining a “Current Expense” levy with an income tax; or allowing the 2026 emergency levy to expire and compensating by shifting inside millage to the permanent improvement levy.
Archbold school district voters currently pay two emergency property tax levies: a 3.37-mill levy generating $1.1 million annually (expiring in 2026) and an 8.27-mill levy generating $2.7 million annually (expiring in 2028), for a combined $3.8 million each year.
Addressing the first emergency levy, if voters chose to replace the 3.37-mill levy with income tax, the equivalent would be a 0.50% traditional income tax, generating $1.7 million per year, or a 0.75% earned income tax, generating $1.4 million—both of which would bring in more than the current $1.1 million.
Replacing the 8.27-mill emergency levy with income tax would require a 1.00% traditional tax ($3.4 million annually) or a 1.50% earned tax ($2.8 million annually).
In this case, the traditional tax would raise more than the current $2.7 million, while the earned income tax would bring in slightly less.
Combining both levies into a single income tax would mean 1.25% traditional ($4.3 million per year) or 2.00% earned ($3.8 million per year). The traditional option would produce more than the current combined $3.8 million, while the earned option would match it almost exactly.
A traditional income tax applies to all taxable income, including wages, salaries, pensions, and investment earnings, so retirees and those with non-wage income would still pay.
An earned income tax applies only to wages and self-employment income, meaning retirees and those living on investments would pay less or possibly nothing.
Shifting entirely from property tax to income tax would generally reduce the burden on property owners, including businesses, while increasing costs for individual earners.
Unlike property taxes, income taxes do not directly tax businesses as entities – instead, business owners and employees would pay based on their individual income. However, businesses would benefit from reduced or eliminated property tax obligations on their real estate.
In Archbold’s case, if property taxes were eliminated, the tax burden currently carried by businesses (around 38% of property tax revenue) would shift to individual residents through income taxes.
This redistribution would particularly impact individual earners while potentially reducing costs for property-rich but income-poor residents, such as retirees who own valuable homes but live on fixed incomes.
Board President Jeremy Hurst weighed in, “Another great point here is you make all of your property tax – these two (existing levies) go away, you’re really redistributing who’s paying what to you.”
Currently, under Ohio law, taxation doesn’t have to be all or nothing; the district can choose a mix of property and income taxes, ensuring revenue comes from both real estate and earnings, so the burden isn’t placed entirely on one group of taxpayers.
Any income tax option would require voter approval. 34.93% of school districts in Ohio incorporate traditional or earned income tax into their revenue sources. “I can guarantee you that number is going to go up very rapidly on the heels of all the tax reform stuff that’s going on,” Conley added.
School officials and Conley discussed various combinations and strategies for structuring future tax policy, weighing the pros and cons of a real estate levy, earned income tax, and traditional income tax.
The conversation also considered the possibility of increased real estate tax revenue from the Rover Pipeline in the future and the potential of constructing a new school down the road.
In closing, Conley posed several questions for the district to consider: Will an income tax help meet the board’s goals? If so, which type should be pursued, if any?
And what alternative options should be explored next? “I think you’ll need a little time to sort of process the choices,” Conley advised.
The board agreed to move its regular September meeting to Tuesday, the 24th, and will follow it with another financial work session to begin drafting the tax policy. Both the regular meeting and the work session are open to the public.