001Um, take a moment, please. >> I pledge algiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. >> All right. Now, um I don't really have any welcome or opening remarks. Just a note that this is a meeting to discuss our taxation policy. Um and that Mr. Kong will be here. He'll be a couple minutes late. So, he'll just jump in when he gets here. And Mr. M is the role. Miss Shaw here. Miss De here. Mhim here. Mr. Wolf >> here. >> Okay. Okay. Good evening. Good to see you guys again. It's a pleasure. I'll pick up where I >> believe it was like a month ago. >> It Yeah, it Yeah, it feels feels
002Yeah, feels like a month, too. >> Long month. Yeah. So, it's good to see everybody again. Um, back to our second work session. As a reminder, this is a 2-hour work session that I'll have done by 6:30 because I know we have a less a short time frame. So, there's a lot crammed in here. Um, what I if we don't quite make it all the way through, we'll just start the next meeting with what we didn't finish this time. And I because I don't want to rush, there's some really important things for us to kind of talk about and flesh out for the drafting of the policy. Uh, before I really kind of get back into the recap though, I do just as a as a reminder for the community, I you all know why
003we're all together. The key is we're talking about developing some written guidelines for the future around how the district would approach taxing the community. Sort of the timing and the types of taxes and the rationale for why you would make those decisions. Uh and trying to put that in a format where the community can read that and understand uh what you're thinking and how that might translate into their their cost structure as they evaluate the community. So part of my responsibility is to provide information sort of homework so that you can know more in more detail sort of how you stand and what you uh look like. Uh I'm going to go back over the first meeting. The f in the first meeting we talked about your current tax system and schools don't have a
004ton of options related to how you attack how you tax your community but you have a few. And based on your current tax system you all have a reasonably diversified portfolio if you will of tax revenues. you have property taxes and you have an income tax uh that helps your tax system also is structured in a way where it might be able to be positioned to grow with inflation over time. So the income that comes from your current tax structure uh with with adjustments if the goal is to have things in place where your income can grow at the rate of inflation is is is is in that position today and might be able to be tweaked. The reason that's important is that many districts go back on the ballot because their revenues are flat
005over time and expenses grow. And so you to the extent there's an imbalance, you're going back to the voters more frequently. And that's really what led us to this tax reform initiative. So we're the first two bullets are really positives for your current tax system. The third one, you do have exposure related to your current income tax and that exposure I refer to as renewal risk. anytime a school has to go back to the voters and it doesn't matter which community any community voters have a tendency to either be supportive of not or not supportive and you remember the the the data from last time where I tracked whether or not we had grow improving voter support or declining voter support. Um the other part of this is that your your existing tax system as
006it is today has a low to moderate structure that allows you to a maintain your current facilities for the next 50 years. So this thinking about the tax tax policy is really a long long-term view. Um so you do have money for maintenance but as these facilities that we have today continue to age as inflation continues to be a factor in the costs of everything uh across the country the existing system that you have for maintenance and repair is probably going to prove to be inadequate down the road. The next part of is that in terms of major capital improvements, the need for a new building for example or an expansion of a building would have to be addressed because right the structure you have today would require something new to be added to allow
007you to address those things. So that's that's the snapshot for your current system. Overall your voter support has been fantastic. That's helpful because if you're go 90% of districts in the state have not had the same luck and experience with voter support as you have had. So imagine being in a place where the voters are moving away from supporting the district and needing more from them in the future. So that's a positive. We talked about comparing you to districts in the region that um uh on a number of different basis. One was how much do your residents pay as a percentage of their income for the school district compared to other school districts within the region for their school districts? And it was a one-sided analysis. In that first analysis was just how much money
008are they paying. On the second half of that I talked about what are they getting in return for that because you can't just look at how much am I paying for something. You have to also ask the question am I getting value for what I'm what I'm paying. And I just went through this cuz I bought new tires for my car today. And it's like the price range for for tires can be pretty and I'm like well gee do I need run flat tires? You know given I drive 50,000 mi a year. Is that worth paying an extra $200 a tire to make sure I have that? So, I you know, you go through this whole thing of trying to figure out uh are we meeting the need meeting the community's perspective of value in
009return for what they're paying? And we saw that you you performed very very well in that uh that comparison that comparison group. And we're going to go into that in a little sec in a second. But um but understanding that particular table that looks at affordability changes for every single district because from year to year to year each district will need something else. Uh you're along that line in that there could be the potential for a future facility need or maintenance need or maybe an operating need. And knowing that you're already at that if you're using the basis of comparison to be the regional districts, you're already at the higher end of that scale. The question becomes do we how do you continue to maintain the value proposition and that's one of the the key
010things of having the tax policy. So we top performers with the performance index top performers on the gap closing. Uh so number number one for both and if we just use that it's very clear that you're the you know the value was there. Not to mention the things that um we didn't really go into, but home values also significant, you know, reflect the quality of the school district. Most people when they look to buy a piece of property or a home first check to see the quality of the district and that, you know, the fact that it's a Granville school creates a premium for housing as you all well know. So, um, we didn't go into that in terms of tracking the value, but we know that's a value. And, uh, there was a homework
011assignment at the last meeting to ask you all to check around with your friends and family and neighbor to see if they, uh, had any perspective of their views of the value of the school district. Did anybody happen to have any conversations with anyone about that? >> Well, I do that on a daily basis as my job. So, okay. um anyone moving here, buying a house here or staying here and upsizing is obviously, you know, most of them are doing it because of the schools. So, you know, the consistent messaging is that, you know, folks are really supportive of the schools, but you know, there are folks who are, you know, kind of tightening their budgets a little bit and do have concerns, you know what I mean, about the future and and what what
012that might >> I think this is a more of almost an educational thing we have to do. Quite a few people that I talk to might say, "Well, my kids are out and I'm done." And I don't mind explaining to them that this isn't a private school and that you pay tuition, then you're done. >> And most people, it gives them pause and they they don't think of it that way. They think, "My kids went through and I'm I'm finished." Well, no, you're not. If you want to be finished, you have to move. You have to move. Yeah. >> Right. Yeah. And and that that goes to other conversations and >> I think they realize that >> other people were helping their children and here's an opportunity. I like to say you can give forward
013here >> and that you know you're you're still keeping the value of your home as long as as because the school districts. Mhm. Mhm. >> But that's that's and I bet you that's a a misconception almost anywhere when it comes to paying property tax on school. My kids are done. I'm done. >> You're not if you're public school system. >> Yeah. Did did so in any of the conversations uh did you ever pick up on anything that sounds like there's just an overall sense of pride where people are saying you know this is we're gr I mean we're Granville right you know there's like this degree of exclusivity and pride and identity that goes along with I'm I'm actually asking that as a question I I know how I how I feel about it because
014I've been involved over here for years but I've known people where even if I didn't meet deal with them here somewhere else and I run into someone that says they live in Granville they sort of you you sort of pick up on that sense of pride and ownership and you know and kind of like this is what makes us unique and we like being who we are sort of thing do you is that still a feeling that you get from the community generally speaking >> the performance and the value of the schools is sort of like never a question I've been a part of so many different school vendors and things like that >> but it's almost just assumed Right. And so we're really up against economic times and people on fixed income and increasing
015potential for the need for school taxes that's untenable, unsustainable for many of our residents or at least they perceive that, you know, in the headwinds of general property tax feedback and other tax feedback are going to continue to be challenging as they have in the past. Like I don't think we've ever just green rubber stamped the school debt easy pass. No, no problem. We usually fail one before we pass one, right? And that keeps us in line, I think. I hope and so forth and and I think we have a great story on the economic side as well and so forth given our cost, but it's not going to be easy and it's not getting easier. >> I I agree with Tom. I think there is a lot of pride especially when you talk to
016people whose kids are maybe in college or are out in the real world so to speak that how well academically at least uh our kids are ready for college >> academically the they don't seem to be overwhelmed by that portion of you know, there's we all know there's lots of changes or even in the workforce if they if they're going down another >> they're prepared and I and I do think people really do appreciate what and the value of what they get in a grand education. I don't think it we moved here 26 27 years ago and because of the schools and the schools exceeded my expectation of what prepared my three children >> not only for post high school but for the real world. >> Okay. the sorry another thought the so the tax
017policy starts out with a statement that says that your your intent is to provide something to this community that either connects to a quality education or a full range of services you know and the level at which you would hope to be able to deliver those services either at an excellent level or just an acceptable level I mean no one ever says an unacceptable le level. But um so the this is important conversation because the the goal is for you all to really have a handle on uh what will resonate the most with the community. And you know to the point of the affordability and the difficulty of people paying taxes today. Um we're talking about a policy that is dealing with the next 100 years, not you. So today and and tomorrow. uh and
018how how is it that you intend to sort of continue to deliver what the community expects even when times are tough and when times are you know are are flush and people are doing really really well. So it's an elevated level of thinking about your service delivery model and uh there are there are places that will just say we you know we have a commitment to deliver the best product that we can deliver because this community depends on that. Uh I will tell you again working in I work with 400 government governments around the state for 36 years and if I mentioned Granville you would assume for a moment that most people would say ah Dennis University that is not the first thing out of their mouth it's the school district across the state people
019recognize the school district even over the community itself and the college as being what this is this is really your identity this is what makes put Granville on the map. So, um, when we get to that point of the policy, the wording around those delivery statements will will really matter. But these are these are important things and, uh, this is why we're doing this because there are people that are saying and and fairly so that it's really difficult to continue to pay taxes and and so on. But to a degree, they're inevitable no matter where you are. And the challenge becomes where do you go if you don't go here, right? if you you know the the options of picking a quality education and this type of a school system uh there aren't many in
020this region that you know you might have to go somewhere else which is why we're going to go into this other part of describing who you might be. So we talked about the last time that you uh received money from taxpayers about seven and a half years ago. Uh your fund balances part of the tax policy is a dual purpose. One is to um is to talk about your taxation. And the other is to talk about the use of cash that you have so that lawmakers in Columbus and even at the county don't try to decide for you how to use your cash. And that's what we suffered through for the last 6 months is listening to lawmakers ch trying to establish a maximum cash balance for school districts. Those maximum cash balances should never
021be determined by anyone other than you all. um it's it's none of their business basically on your in on how you intend to put your cash to use. But I do want to we we we touch on this because there are people out there that will look at balances and say you have too much money. You have too much money. And sometimes it's helpful to look at that in comparison to what other school districts have. So you all do not have too much money under any set of circumstances. Your balances are relatively modest compared to the districts of the region. uh and they could be changing over time. In terms of who's here and who's paying taxes, uh to you all, it's no surprise, but the community uh is aging. Uh and most of Ohio
022is aging. You're not by yourself. There are some communities that are starting to get a little younger, but uh and then your population of people 19 and under is starting to to decline, but everything is a cycle. There's a point at which you we work our way back around that whole thing. Uh you do have higher number a higher number of people today on fixed income and um fewer people with kids in school. Back to the value proposition when someone isn't when they're not using the schools and they're like, "Hey, we you need some money from them." Are they going to say, "Well, we're going to support this or we're not going to support this." And what would be the reasons that they would be supportive? You know, what what are we being able to
023say to them as a value? you know, quality of community, pride, ownership, responsibility, um, and home values. Those are all key contributors. But maybe to some, uh, folks, and I talked about, uh, some districts I think in the past, they're looking at creating new uses and programs at the school that allow older people, I won't say senior citizens, but older people to be be more active in the facilities themselves. So they have a sense of I go over to the building for this and I am participate in that and it that also elevates the level of of connection and value to what they're doing with the within the building. You get a sense that that's just demographic shift like happens elsewhere in Ohio or is it because of intentional decisions on the community part to
024develop housing that's specifically restricted? >> It just seems like compared to the past we've got more retirement communities and more age restricted. Well, I I think where a lot of this is coming from or is it just generally population in Ohio? >> I think it's a little bit of a mixture of both because I think there was a window of time >> specifically that we said listen if you're going to develop develop 55 and over and or senior living where you know we're not you're not impacting the the capacity of the students. So, and quite honestly there was a market for it. I mean, Glanchire was a perfect example where the sign said starting at 550 and there isn't a house in there that's 550. >> It's 700 to >> a million now. >> So,
025I think there was an intentionality around some of that in the conversation 8 to 10 years ago. But um but again you can also you can als if you don't have the right mix that can backfire too and seniors have generally been very supportive person but you know I think they're getting more and more squeezed right and at least that's what I hear from people in that demographic is they're feeling more and more squeezed on fixed income and the extra whatever per year is not going to fly. So, we'll see. >> So, one of the the fascinating points that surfaced when we did the the analysis on your your demographics, the first 45% of your voters are receiving some form of fixed income was a and to be clear of your voters, not your population,
026but just the folks that are 19 and over. The >> What do you mean by that? >> 45% of the people eligible to vote are are receiving some form of fixed income. So they're either receiving some type of retirement or some type of social security. >> So they're 59 and a half plus >> or you know so social security can be disability other other other um supports that are not necessarily tied to age >> or retirement you know I mean so the but the fascinating thing is that the most of my school clients that have this they have a much lower income. So you you have a higher a really really high income retired group. So you know so back to the dynamics of affordability even though they're on fixed income you're looking at fixed
027income of people that are make even as retirees on $200,000 a year or more. >> Okay. That's >> Yeah. which is which is a strange you know you all are among just a handful of districts in the state and we're going to talk about them that have that that structure. So um usually when I'm talking about fixed income I'm talking about people that are earning 50 to 100,000 a year total fixed income and you guys are twice that number. So it's um so we have to you know there are times doing this as much as I've done it there I've been in meetings where three months ago people were like well I think my taxes are fine and then headlines and the constant discussion around how many people are unhappy with their taxes seems to
028have indoctrinated people into this category of being unhappy with their taxes when six months ago they didn't give it a second thought and they're sort of like maybe I should get on the bandwagon. and and be unhappy with everyone else, you know. Um, you know, it's just weird how that happens. So, I you I I don't want to say there are people in your community that are definitely struggling, right? It's not um your your your pop your poverty numbers, you do have poverty. They're not as big as most communities, but there are people that are that are having a hard time. But the vast majority of people that you have that are on fixed income are doing significantly better than a lot of communities where people are on fixed income. So just as a just
029as a a background. So when we start going into um is it not moving? Oh, it went my computer must have dozed off. >> There you go. >> All right. So this is a really important conversation. the when we begin to look, it's important a to know who you are. It's also important really to know how you exist relative to everyone else and and you need to have a basis of comparing yourself to someone. In that last meeting, uh I always start with a a regional comparison. So, I put a pen in you and then draw a circle and pick 19 other school districts that are geographically the closest to you because typically the the cost of anything is relative to what you know around you. And so, school districts, you know, athletic leagues, friends,
030neighbors, you know, all of all that ends up being where someone's talking to someone in a school district that's a few miles away and they're saying, "Well, my taxes are this." And your people are saying, "Well, my taxes are that." And it tends to that's their basis of comparison. But after that discussion we had last week, there was some discussion that maybe the comparable group should be either a slightly different mix, whatever. What what's important about this is that when you put a policy together, there are benchmarks that each year we have to check to say how are we doing compared to this comparison group. Um the origins of the benchmark is really that second bullet. How would your residents compare their tax costs to others? So when you're talking to someone and they say
031my taxes are high, if you say to them compared to to whom, what is their answer is their answer and I don't this is your call, not my call. Um so as you think about this, it's the answer to that question. And if their answer is, I'm comparing my tax cost to another wealthy school district that's nearby. I'm comparing my tax cost to another wealthy school district that has academic, you know, performs at the highest level somewhere else in the state. But uh the answer to that question is what we should be doing on number four and that is what value should we be just using to pick our comparable group? And we don't have to answer this today, but before we finish the tax policy work, it'd be nice to have 19 districts that
032you all say, "This is a good district to use, and this is a good district to use, and this is a good district to use." All of which should ultimately come back to making it whatever you think your residents would be using. And you know, it could be what you tell your residents. You could be saying to them, these are the districts that we use to compare you to and these are the reasons that we compare them to you and this is what you should be basing your tax cost on as opposed to something else. But uh figuring that out. So let's do let's do talk about this. >> There are two groups. There's the local one where people always embarrass us in New York even though we're different kinds of districts and then there's
033the high performing Columbus ones. Right. Internally the district I think it's useful to use things like falls and Wyoming and others that are technically more exactly like that, but I don't think they resonate with voters at all. I think voters just care about local and high performing Columbus because that's their options. That's who they talk to. That's what they're making a decision if they're going to live in Westville or Granville or whatever. It's kind of just my impression or if they're going to live in, right? So, those are the two groups and it's kind of biodal because those are very different groups, but I think that's a interesting way to look at it. and internally maybe we consider others that are more technically like us in terms of demographics but >> so let's kind of
034like have a little conversation just around around that I put a few examples these aren't this is not an exhaustive list so you've got you know wealth indicators as saying because you are are among a small group of the wealthiest districts in the state academic performance you're also in that particular group local demographics there are things within your local demographics. For example, aging, like should we be comparing ourselves? Should our comparable group look at communities that have 45% of its residents on fixed income? Because if we're thinking about the impact of property taxes and your property taxes are 80% of the cost to a person that's on fixed income versus the the rest of the school districts in the state that have the same. it would could drive the question, should we do some things
035to try to adjust to that particular group? There's a there's, you know, there's a lot of different things you can think about in terms of pulling it in and I have the ability pretty quickly to look look at districts that are like you on those factors and and put them put them in here. >> Excuse me. One of one of the things I noticed on your alternate districts, >> I think is where Granville is a little more unique is that we're not a true supper in the sense that you think of Beexley Bay Village up in Kyhoga County that they are suburbs of a metropolitan area of Cleveland, Columbus, even some of the Cincinnati ones with Mary Mount right >> and I think >> we we all know times are changing here in Lincoln County
036but it's it's still not viewed as a suburb I think >> by folks >> yeah I I agree with you completely >> you know as I mentioned earlier when I moved here when I told 27 years ago when I told people I was going to Columbus they're like what >> like it's really tough And granted, I was using we have lived in suburban New York City and suburban Washington DC where people will commute will live like an hour and a half away and commuting. >> Yeah. >> So, but you know, Lincoln County is still not viewed as a suburb. >> Not anywhere new home buyers work. >> New home buyers. Yeah. A lot of them are in Columbus. >> So, maybe that's changing. >> Yeah. There's one >> and I think you know Newark and
037Zanesville have changed with how a lot of people were working east going east and >> business and industries change. So they're going to Columbus because that's where the opportunities are. But it's, you know, it's just more anecdotal that I think >> we we don't want to think of ourselves as a suburb >> and I don't think we are a suburb. >> I agree. I don't think you are either. >> We've had a lot of return to office, but there's still a lot of people who are full-time. >> The research organization I work for, we don't have a home. We have a mailing address in Washington DC. We are all over the country. That's a big draw here, right? >> And that's and that's how it will always be, right? And there are people specifically looking
038for those jobs because they enjoyed being remote. And so then, you know, live in Granville or, you know, >> in Granville, right? >> Right. And so I think the commute starts to mean a little bit less. And quite honestly, I know, you know, the commute into Columbus with the expansion of 161 has been dramatically increased, you know, or improving. Um, so I think more and more folks are going to move out here have to move into Columbus. >> Anything else that jump out for? Well, let me first tell you I so I I have software that can easily select districts based on any measurement you would want to look at. I so I picked all the highest performing school districts in the state that also met the highest wealth indicators, median home f home values
039um um and uh and family income. Then I also said overlaid that with within the within the proximity of you guys plus anyone else. So and Britney provided for me she has a core list that they're included. So what you're looking at would be sort of um like the crim delicac of Ohio school districts. >> David, are there any other districts that have that similar like high fixed income demographic? >> Oh yeah. Yeah. Quite a few. Yeah. >> Yeah. It's it's it's more the norm than not um statewide just because the entire state has has aged pretty significantly. >> High performing school districts. >> Oh, no. No. Yeah. So, no. That that there's a lot of aging districts. There are very few districts. Now, most of the districts that are on here would all have
040similar aging demographics other than Nolan Tangi. Um, see Westerville, even though Westerville is not far behind you all, uh, Dublin is, uh, is aging. Uh, but most of these most of these guys are all aging. So, the younger ones, the the thing I was before I was at thought. The other thing that stands out when I look at this list, you guys are the only college town >> on this list. >> Yeah. In my opinion, it's very hard to find a comparable district um with location while you know the university >> is very diverse. Keep saying >> got capital. >> Say it one more time. >> Beexley has capital. >> Oh, that's right. Yep. Beexley has >> capital >> an over small but important school. Yeah. they lack the egg land that we have. So
041they're not going to be faced with, you know, a huge residential development like we might be. So >> it's very hard. M so when uh but we you're going to be required to make a decision about the list the otherwise we'll always be shooting in the dark as to where you know how are we doing compared to you just can't tell if you're getting an A in your class and there's no one else in the class. It's sort of like hm >> I I bet you if we just did a straw poll right now and everybody marked down >> I bet you there would be a lot of overlap in the list. So I I would be curious to see how that works out. We'll do that at some point, but >> uh I know
042John just went down his list and put little check marks near and and and I guarantee you they're going to be very similar. >> And then um you have the list from the first meeting as well. So, what the goal would be to try to get to 20 total, including you, that would be districts from the first list, potentially districts from this list, and if there's any other districts you'd want to look at. I I did want to take this one step. Oh, come on. Further. And if you remember the table, last time when we did this table, you were number 18 or 19 in terms of the affordability. So this is the table that uh takes the total tax cost of the district as it is right now uh as a percent of the
043median family income. So these are your wealthiest highest performing districts in the entire state. So you went from 18ish to 11. So middle of the pack when comparing yourself to those particular districts. Now there's I didn't these aren't these districts aren't parsed on size or anything like that. This is just those those key criteria that I had uh discussed on the previous page. Um this then presents potentially a different view of of what you are um what your the cost side of the equation for your taxpayers. I then added the same comparison for the performance index score and the gap closing score. So previously with the with the regional districts higher cost but number one for performance index number one for gap closing. Now when you change that comparison group to the districts that are
044all sort of high performers then you we're back we're looking at even though the cost isn't as high you know we see a slight change in the uh the ranking for the performance index. We drop down to four. I mean those percentages are relatively close on the on the gap closing. Not that these are the things that you would pick as your your the things that you would compare. But if we're looking at academics and looking at the cost picture, you see how it sort of shifts shifts the dynamic of the whole thing. That's why that basis that comparison is really important uh to make sure that you have a group a that uh you think is representative of how you're operating. That's the first thing. And the second is that it's a group that
045people in your community would say, "Oh, yeah. I I know Ottawa Hills and okay, I can see that. Let me go back to this table." Um, yeah. Or I know Chagrin or I know Ottawa or I know I mean obviously we know New Albany and so on. But um the key is just to make sure whatever that comparison group is is something that people would be able to identify on on their own. Real estate you Okay. So, back to if you're buying a house in Granville that's a 5,000T home that's similar to a 5,000T home here. Are those homes priced the same? You know, and what are you getting, you know? So, it's it's it's just trying to be able to make sure people can have that connection to it. >> David, is there any
046value to listing the collective property value of a particular school district? Right. So the value of all property in Granville school district is around 825 million right we have varying degrees of businesses agriculture residential when I think of like effects uh maybe even in Indian hills they don't have as much perhaps agriculture >> but collectively like the value of their property >> could be in the billion range right so when you take a look at an operating annual operating um cycle for for a school district is we need to tax our base X number of mills to create you know that revenue versus other districts need to maybe tax a little bit less and may skew at least the perception of those numbers >> because the collective value of their property could be 1.2 2
047billion 1.3 where we're collectively only around 825 million. >> Um, so that's something I think to consider. Have you >> thought about like throwing that number into >> more of these comparisons of houses we have on acreage versus the number of houses in Beexley >> or per or per acre, right? >> Depending on a town like Beexley. >> Yeah. The So, yes, we could put the the comparison in there. This is actually uh a little bit of what you're touching on right now. The I in a lot of meetings where people will look at this this table and or not this one um this particular table. Um there will be some folks that will say well this district or that Kinston or Orange has a larger tax base or they maybe have a pipeline or
048they they have something that is contributing to keeping the cost of the the taxes low. >> So in context we can say right Kenston may have 3% a Greenville resident we say well how do we get it back down to 3%. >> Yeah. And and most of the time the key part of that the thing that skews your number what makes your cost here is this pie chart. Many of the districts that are on that that table that has that have an overall lower cost the whatever orange brown slice of the pie is significantly larger than your slice of the pie. So and this is not news to you all and this is something we've known forever. um your business, your taxes have to 85 88% of your tax cost, property tax cost has to
049be borne by your homeowners, not because we you don't have businesses to share in that tax cost. So that's the that's at the heart of the thing that shifts your your overall cost further down on that list. If I were to show you compared to other districts that have this same mix, you'll see a real similar pattern in that the tax cost is is higher. But the the the the tax policy when we get to the the formation of the language um has to say we don't have a magic wand and we would overnight it would be great to make that 50/50. So Heath is 50/50. >> Okay. They got all these commercial businesses and they're continuing to get fast food restaurants and everything else every other day. Makes a lot easier to to cover
050their tax bill. Um it would be great. I I want to show you this because not only is the pie skewed, it's becoming even more skewed. You're you wereif at least 15% back in 2005 and now we're at 12%. It's getting it's getting the getting smaller. So that will that will potentially add to the local burden. Um >> part of a conversation. >> Yeah. So u putting you know the there's two parts. The first part is the awareness that that's kind of at the heart of it. Um the second part is saying to the community uh we don't have the power to change our tax base directly. I mean indirectly, you know, when it comes to negotiating for incentives and what type of incentives you'll support. >> Yeah. So that's why we have an incentive
051portion of the tax policy. At the very in the tax policy, you're going to say, uh, you know, understanding that every time you give a dollar away for economic development, that dollar ultimately has to be made up by one of your residents. So that's why you all should be really really careful about how generous you are relative to tax incentives. I mean creating jobs is great and all that's wonderful, but if you're giving away money on this side, the vast majority of that is going to come back to your taxpayers under this structure and there's no nothing we can do about it. But it does ultimately we still have to realize we have no control over that. But the outcome is the cost is what it is and what do we do from a future
052taxing perspective to say this is the the cards we've been dealt. This is how we're intending to navigate this trying to keep the taxes at a in a structure that is affordable for most of the people that are here and how you know how can we possibly operate into the future to push out the need for future tax levies while not compromising the value proposition. you know what this this value expectation because you can easily cut a whole bunch of stuff and you know get the school down to be bare bones and operate for a very long time but I don't think the community expects that of you. I think they have a higher expectation. >> No, and I think if you asked any community member, they would agree that you don't want Brandill to
053turn into heat with fast food restaurants everywhere and >> and businesses, right? I mean, it would be great to have some more. >> There are days where I would like to get a sandwich, you know, at 10 o'clock at night as I'm passing through and there's nowhere to get anything. So, yeah, >> there's a couple things I want to say before we move on from this slide, um, there might be a better place, David. >> No, I'm sorry. Yeah, you're good. So, one of the things that when I've been involved with the CIC that I've tried to emphasize is yes, this has changed from 15% to 12% over 20 years. And any economic development that we get is just going to help us probably just maintain the 12% to offset other residential developments as they
054may come up. So we would actually be lucky to maintain the 12% through the economic development efforts that are >> ongoing throughout um the community. >> And then the second thing I wanted to say is to keep in mind with this um when we start talking about property tax versus income tax, the income tax is 100% um an individual taxpayer burden. So it's great to have that diverse diversity, but it is putting um further burden on individuals as opposed to property tax which shares that with businesses and you don't have it up here but also public utility >> is a >> smaller portion but >> material >> yeah we can get a pipeline man you know it's like the pipelines are a double-edged sword though you know you get we start to form these policies,
055right? Right. We have that conversation as Granville chooses to be a mainly >> residential community, >> you know, um and and in order to maintain that feel and look, >> it it costs money. >> Yeah. Yeah. I I mean, I think it's a that's a fair statement. You know, this this this community, you know, is really likes until it gets too expensive from a tax perspective really likes what it is. You know, it it I I use the term exclusive. I know that can cut different ways and different audiences, but there is a degree of prestige and exclusivity to this community that this lends itself to. And the more you, you know, every time you open a new Chick-fil-A or White Castle or whatever, that level of exclusivity starts to drop down. And you know,
056so but I will say this isn't without its value because look at the change in value since 2005. So this is mostly homes and that's assessed value. So assessed is 35% of the number that you see there. So you multiply that roughly by three and that's the full value of all the homes in the community. They have shifted significantly and that's even during with the recessions and COVID that depressed home values for a little bit. So, the overall investment in real estate in this community has been astronomical. Um, and there's there's value on the backside. I have one client that asked me to do a comparison of um return on investment on a home versus the property taxes that they paid to the school district during this same time frame >> and wasn't even close.
057I mean, it was like a 10 time return on the property. It was wasn't even close. So, >> so that would be Would you be interested in seeing that? >> Yeah, it um I I never frankly I should have thought of that, but I never thought of it. That's why I like doing these meets because people will ask me about something I never thought thought of before. And I put put it together and I was like, "Holy cow." And that really kind of brings it home when you look at what you're paying. And then not to say that the school alone is why a home would go up in value, but >> doesn't hurt. >> Was a real smart investor guy and financially quite savvy and so forth. Ran those same calculations and he just
058basically came to the conclusion. No doubt the best investment he can make is paying school taxes. >> Yep. >> Right. Because the property tax value goes up so much. >> He's investing all kinds of stuff. Guy and I've seen other people that needs to be highlighted as we go out. >> And for me, it proves what we're paying that our constituents, the parents are asking for certain things. >> They're not free. >> No. >> If you and and I'll I'll have conversations with people. If you want leather seats in a car, if you want serious XM, you know, or or if you want to fly in first class, it's not all the same price. >> No, it's not. and and the things that that that that folks want in the community and I think we
059need to continue to educate and talk about is we we can give you the basics that the state wants >> but you can't expect the same results >> right yeah >> um so they need to understand there's there is a direct correlation if you want you know multiple AP classes is what you know whatever whatever you want >> there's a there there is a cost like in everything >> um and I think we I think Granville schools have always proven you're getting what you pay for >> plus some >> Yes. >> Yeah. We I I sit on the school board at St. Ursula Academy in Cincinnati Catholic school for girls and our tuition is 18,000 a year plus another 2,000 for fees. And we just went through a process of looking at another tuition increase.
060And we uh we took the time to look at how many of our girls are getting scholarships to the best schools in the country. And for the investment, these families are doing incredibly well. I'm sure you've got a pretty successful track record of students getting getting scholarships, getting into the top schools for the price of $6,600 a year sort of on the median home. And I'm sure you've got a few fees in there, but I would have to say not only is it a home value aspect, but just true return on investment on this on the students that that have come through the system is another another back to to the things that could be values that are overlooked, you know, and that should be a part of the conversation when you're talking about it.
061So those are all good good things. Okay, so I'm going to move on real quick. So we're the the tax policy is about making sure you try to the goal is to over time not tomorrow is to have a system where all the things are working together to accomplish goals that matter matter to you all and these are the same goals that you would hope would matter to future boards and future residents of the community. So this is your existing tax system. One of the goals generally is, but not always, I haven't had anyone tell me they don't want this, but one of the goals is to try to be in a position where once the system is as good as you can get it, it allows you to go as long as possible without
062having to go back to voters. Now, long as possible could be 5 years or it could be 30 years. It sort of depending on on what happens, but it's the goal. The goal is to be long as possible. Um the second is to make sure that it addresses the things uh that are that are necessary to be addressed. So the ability to pay your teachers, maintain a level of quality in that regard to provide the programming that you need, the support that you need to make sure the to make the buildings safe to keep them safe and to provide for new buildings when you go down the road. Uh so your your system uh oh and the fin the final piece is that have all that be as fair to all taxpayers on average as
063possible. So the 35year-old with the three kids in the school living next door to the person that's retired who is on fixed income having as much balance between the two of those taxpayers as possible if that if that's a goal. So your your current tax structure has you near you're at 25 mills. We talked in the last meeting about this column over here is the tax the effective tax rate for your property taxes. We have uh you moved at one point inside millillage to the permanent improvement fund which was a really really really good idea uh because it's 2.75 that stays at 2.75 and it grows. So you'll you so that's why I said this you've got really early stage things that really support the ongoing need. The question was whether or not 2.75 mills
064would really be enough for the lifespan of this school district. And Britney, remind me roughly how much is that bringing in a year? >> 2.6. >> Okay. Yeah. So it >> we're paying on the operating. >> Yeah. So you're already subsidizing that particular thing. Um we have a bond issue that is being paid off in 2031. there's potential that you might need to do something else facilitywise in the future. You know, how does that all sort of fit into the into the structure? So, I've got circles around inflation adjusting. So, right now, your property taxes will not go up. They don't increase with inflation because you're at not at the 20 mil floor. And I I just not for you all because you've been down this road before, but I do want to take a
065second and just jump to this page, page 19 in your handout. This is a very simplified illustration of the 20 mil floor. And this is more for the general community that might be watching or listening in. So when I talk about the 20 mil floor and the advantages and disadvantages, so it's not it's not all one or the other. At one point in the past, state lawmakers said, "Okay, when a voter approves a tax in a school district, and let's just assume this this voter approved a tax that was 26.5 mills, um that tax cost that homeowner $927." law state lawmakers said that should be the most that that taxpayer pays for that particular levy even if their home goes up in value. So as they imposed a law that said as a home goes
066up in value the taxpayers should still only pay 927. So they instructed the county auditors to just reduce the rate every time the home goes up and that mean that would then leave the taxpayer still paying the 927. 927 home goes up. They just keep reducing the rate, reducing the rate. And then there's another rule that says when a school district reaches 20, the 20 becomes fixed. We refer to that as the floor, the 20 mil floor. So what happens in that the year that you're just above 20, you're still paying your 927. The next year, your home goes up in value. You would have otherwise gone down to 19.46 four six mills, but the state rule is you have to go back to 20 because that's the minimum. Then your taxes go up. This
067right here is also one of the big contributors to why we're dealing with tax reform. There were a lot of school districts in the state that over the last few years were hovering around this number. right at the time the 30% home value increases went into effect and that 927 shot up to $2,000 and people went crazy. Um so two sides of the equation. This is if this is you then this is the this money represents additional income coming to the school district. It is now capped at inflation whatever they determine inflation to be every year. Let's just assume it's 3%. And so we won't see any more 30% numbers, but 3% is still better than zero. The other side of that coin is that your taxpayers, without you doing anything at all, once you're
068at the 20 mil floor, as their home goes up in value, they'll see their tax bills going up significantly more. So it's a double doubleged sword. On one hand, more revenue for the school district. On the other hand, higher taxes for your taxpayers. Um the benefit is that if if you're receiving a lot of your income from property taxes, which you are, then it helps you stay off the ballot in the future because you're getting a little more growth in that revenue stream. So I want to go through that to say going back to this table and I will say as a complete uh complete disclosure I have a school district that said we never want to be on the 20 mil floor because the majority of our residents are on fixed income and if
069we're on the 20 mil floor it's going to hurt them. So, we want to stay away from the 20 mil floor and we want to do anything else in the future as an income tax to soften the blow on those taxpayers, but they are in a community where most of their retirees also don't earn earn very much money. In fact, and you can tell this is fascinating. Um, they have more people earning social security that are getting retirement income because retirement income includes pensions and things like that. In a lot of bluecollar communities, people didn't have jobs that actually had a retirement system or any type of pension program. So, majority 90% of their income is solely social security and Walmart. So, that creates some additional caveats that you would think through. In this particular
070model though, looking where you are, you've already you already have the income tax, which is great. You already have great uh taxpayer support. So the question says is how do we do we want to make inflation adjusting revenue a priority? If the answer is yes and if the answer is how sensitive are you to getting to the 20 mil floor? If you're not sensitive then getting to the 20 mil floor sooner rather than later is helpful. And there's a a couple ways to do that. One is to is to move the remaining inside millillage and move it down to PI because it comes out of the 20 mil calculation or ultimately converting one of the other property taxes into an additional income tax at some point in the future. So dropping your property taxes getting
071to the 20 mil floor moving that revenue to a different type of a tax and creating some balance. not a recommendation, just concepts that you can think about. I have a couple districts that are on the ballot that uh are doing just that where they uh in order to get to the 20 mil floor, they converted or at least they're on the ballot to convert one of their operating levies into an earned income tax because they think the earned income tax and we'll talk I know you guys have a traditional. Um you will talk about having a traditional. Uh you also should know you can change to an earned. It's not like you're stuck forever in a traditional. So those are things that your tax policy should say out loud. If would it ever make
072sense to try to change or if not why would you stay is a traditional so the uh augmenting this system to get adjustments for inflation revenue additional revenue for long ongoing maintenance uh and um oh that should have been ongoing operations I forgot the word operations and major capital. So that would be our future goal. So, we talked about the valuation split. Um, I always do this just to ask myself, it's one thing to look at two years without looking at what's in between because there could be all kinds of interesting variations. But as I look at the his, you know, the history year by year, it's pretty consistent. And if you were to say to me, David, do you think we're going to see much of a difference in this? I would unless it's
073a data center or of some type and I don't even know what these data centers are coming in at from a valuation perspective but I I've heard they're not as not as valuable as what have you seen any yet Paul >> yeah so it's like on on on paper you might think you're going to have a windfall and they don't really produce much >> right right >> Microsoft companies are very supportive of the local Mhm. Yeah. >> Yeah. But but it would feel to me like I think that if you if you based your tax policy thoughts around the likelihood that you're going to stay this type of a mix for the foreseeable future, I think that's a fair thing. Um this is the local property. So I I broke it down because you have
074property taxes and income taxes and I wanted you to see the split. So this is your your uh your mix of income uh from property taxes. So it's a little bit higher. Brit Britney just mentioned a second ago that um utility public utilities they pay taxes at the full tax rate and not the reduced tax rate where I was showing how the millage comes down. So for that reason you get a you get when you look at two businesses side by side with the same value property. Let's say uh Colombia has a million-doll property and um a car lot has a million dollar property. Columbia actually pays a higher tax than the car lot because the they have to pay at the full tax rate, not the reduced tax rate. So that creates a slightly
075larger slice when you convert it into income coming into the school district. Still 22.7879%. The next slide breaks this down to um break including now all this is all local taxes property taxes plus income taxes. Britney pointed out that the purple only taxes individuals and if we're going to read the language about the way the income taxes tax. It says that certain business people should pay the school district income tax, but having lived in a school district with an income tax and being self-employed. If you have a halfway decent accountant, very little tax gets paid if you're self-employed or own a business, 99% of an income tax will be paid by just your everyday individual. So, it's it's really an individual tax, but this helps you give a little more perspective. So between what's coming
076in from businesses um the bulk of the pie of what's being paid are is coming from individuals in in the community. Now just to take this one step further this is just the portion of taxes coming to the district. The district gets money from other sources as well. So your total operating budget is beyond is larger than just this particular pie. And I have a little question on there to say any guess as to what the total share of local taxes from individuals would be. And I know you know the answer because it's on the next page. This is this is all income that comes to the oper. This is not facilities. It's just operating the school district. Um so roughly 45% 44% of the district is being paid for by people other than the
077operations of the district sources other than local taxpayers. So it's not local taxpayers aren't footing the entire bill thankfully. Uh but this is important to keep an eye on and um one of the reasons this you there's two reasons your pie looks like this. The blue in most school districts is smaller than this. I just did this for for Heath and Heath I think was 28%. But their state share because the state sees them as being less wealthy than they see you is significantly greater and their business share is significantly greater. So those two components of the pie shrinks the component of the pie that's paid by individuals. Sort of back to we're sort of victims of who we are. You know, we are a wealthy community, which makes the gray slice smaller. Uh, and
078we don't have any businesses, which makes the orange slice smaller, and that leaves us with the blue slice. Uh, we tax policy-wise recognizing that there's no power. We don't have the real power to change this. We just have to accept this is where we are. And what do we do to sort of protect that blue that blue slice of the pie as much as we can so that they can feel like they're getting the value for what they need and they can feel happy about supporting the district. Any questions on that at all? I did want to show you um your large taxpayers and this is this is a twofold thing. The first is that you do have businesses in here. here. I noticed that um your large so the largest non you got the
079college up the street that has a lot of value that's not being you know they don't pay taxes because they're tax exempt. I was surprised that Otterbine is on there. What >> uh permanently >> Oh, that Otterbine. Oh, got it. Got it. Got it. Got it. Um so you you uh you happen I look at this just just just so you have a general idea of who's on there. Um, and those are the the non-abated values. There are some of these that do have some values that are abated that will come back on but not significant. But when you do look at this, um, keep in mind that property taxes, you know, are are at risk for one thing or another. And I always check to see if there's any concentration of taxpayer. you know,
080if you had a General Motors on here or a Ford or some large um manufacturing concern that could be subject to closing down, but when you look at this, you you you see one area and that's public utility. Uh so Ohio Power, Columbia Gas are the two largest up there. Uh are you guys aware of the initiatives by public utilities to reduce the amount of taxes? They were su successful for new stuff, but there's ongoing lobbying to also change. I mentioned that they pay taxes at the full rate and there's there's an ongoing lobbying efforts. So whether you are really tuned into it or not, there is some exposure to you all for this for those two taxpayers to have lower taxes in the future instead of higher taxes in the future. All that means
081is that as a part of the next slide, your fund balance what we do. Okay. Um your your fund balance is there. I want to give you kind of a big picture. So general fund balance people are like okay great we got a general fund balance. It actually serves a purpose and not not many governments ever actually write down what the purpose of the fund balance is. Your policy really should say this is these are the slivers of the pie that make up our fund balance as a defense against any budget commission or any state lawmaker saying that you have too much money. Um the first is that you guys typically should have enough money in that to operate the school district. Uh you've got and especially your district because a lot of your income
082is property taxes. Your property taxes come in twice a year. Typically February when >> Yeah. Yeah. March, February. But between those two periods, you still have cash going out. So you have these cash these periods where you have more money going out than coming in. So you want to make sure you've got enough cash to make sure you survive those periods of time. That's just your operating liquidity. Want to have money for that. Uh you want to have money for your rainy day. So there's a reserve that should be a part of this. That's okay. If anything goes wrong in the economy, if any, you know, and this is a strange scenario, but what if a hacker somehow magically hacks the county auditor's tax collection system and shuts it down uh right at a settlement
083point? Like, do we, you know, what are we going to do relative to that? Now, that's a really strange rainy day, but it could happen. but having some type of rainy day reserve. Um, most districts never plan for this, but I recommend that they do. And that is you should have some type of a piece of your balance that reflects the risk that your renewal does not get approved. Uh, it is it happens. It's less likely to happen here, but not impossible. So, the question is, should the levy should the reserve for that risk be 10% of the total amount? Should it be 25% of the total amount? But you look at the the size of the levy and that levy is a pretty significant um the income taxes ringing in. >> Yeah, that's a
084pretty big number. So, um imagine if you just something didn't go right, the community decides we we're not approving that renewal and you fall out of cycle, meaning it stops collection and you have to keep working, 20% of your budget is going to go away. um unless you have some reserve for that. So typically as I'm uh advising boards on tax policies, I would have something carved out for that. Then the question would be would it make sense to eliminate that risk? So instead of being on a 5-year cycle, your choices would be to make it a longer cycle, so do a 10ear. So that lowers the risk or eliminate it altogether by making it a continuing levy. And there's a lot of conversation in communities about my community will never approve a continuing levy
085and you you all would have to sort of >> Huh. >> We tried. We failed. >> Yeah. So So what if the community knew that you had to keep $10 million set in a savings account and not use it simply because of the risk that you can't renew the levy? >> Yeah. Yeah. So but that >> Yeah. So, um, >> so your policy should say we will always stay on a 5year cycle or a 10-year cycle and never attempt to go to a continuing cycle even though we we realize it creates a renewal risk or of that nature. Um, taxpayer concentration we just talked about. So, you have a you do have a concentration and there um there's also everything okay? >> Oh, we're fine. >> Oh, okay. Well, my back to the door makes
086me nervous like, okay, should I um so taxpayer risk, should there be some reserves there? I'm not answering these questions. I'm asking the questions for us to think about because again, if you find yourself in front of the budget commission and the budget commission says you have too much money, then you say, "What do you know about the need to protect for these risks?" And they'll go, "Oh, I never thought of that." You know, surprise. uh there's legislative risk and we've we're living through that as we speak right now. Uh and I won't even get into the constitutional amendment work because that's too big to get our heads around. And the last one is sustainability efforts which is a new item on the list and that is um there's nothing wrong whatsoever with saving money
087for the sole purpose of not having to do a new levy. If you could the more cash you have the longer you can go. So, um, building that in as a specifically identified purpose for balances and then anything above that. So, moving on to the next page. I Britney sent me the your your current cash policy. So, right now you're you've got a policy that's 90 to 160 days, which in rough dollars is 9.2 to 16.4. Uh, you're at 11,225. So, right in the middle there. Um the question is does that 11 million225 protect us for those risk factors that we've we've identified as well as is that 11 million225 going up or going down? And when you look at the forecast, my guess is it's slight it's going down, right? >> Yeah. So, not
088only, you know, we're we're we're in a position where potentially we're not going to be covering the things that we need to cover. And the question is, should we should we make sure that we design a policy that says we have to have 90 to 160 days to protect us for these reasons? The additional item that you would add to it is that if we ever had 200 days of cash, what's the best use of the money between 160 and 200? So, if we had an extra $5 million and it looked like that was money that you, let's say you decided you didn't want to use it for sustainability, long-term operations, one question would be, would you use it to pay off debt early if you could? And I have some districts that have chosen
089to do that. Now, statewide, there are a lot of districts that have lots of cash and they're really trying to answer these questions. So, in some cases, the question is, do you improve programming if if you can to meet that value proposition? In other cases, I have schools that are reducing taxes or letting certain taxes expire, which you we don't have that in your your current portfolio. Um, paying off debt, using it to assist in improving facilities, things like that. So, the tax policy, we're going to get when we get to that point, I'm going to ask you all, even though we're not in that position today, if a future board finds itself with an extra $10 million and not needing it for any of these purposes, what would be the best use of additional
090money and kind of outlining that because I've seen boards, you know, I've building a couple of athletic facilities that I think probably weren't the best decisions for the community, but there's no one no one wrote any rules or guidelines about the best use of surplus funds and you happen to have a a group of people that are really interested in athletics is, you know, so you want to make sure you've got some guidelines to protect against that. So to the sustainability, the goals would be trying to get revenues that grow with the district's rate of spending. Uh that's option number one. So in looking at your history of spending what you know you guys are usually spending 3 to 4% around there you're you're >> a little higherend. >> Yeah. So um and and so
091there's two ways to look at it. One is um having income that keeps pace with your rate of spending. The other is changing your rate of spending to your growth in income. So, if your income is only growing at 1%, changing your rate of spending to keep you at 1%. Which is not a great long-term strategy, I can tell you because at some point you run out of things to cut and then you start to move into the area of not doing the things the community wants you to do and it all collapses on itself. But it is a choice. Um, so staying at the 20 mil floor helps you reach that goal. getting additional inside millage or you you you already have one part of that into um into the PI fund because it's
092a fixed millage and it grows and it meets the needs of future um maintenance and potentially shifting more of your taxes to income tax if income tax is growing. So, there are lots of districts that are on the ballot right now. I don't know if I put it in here. Um that have put income tax levies on in communities where the population's shrinking and incomes are going down. And I'm like, someone didn't do their homework. You're going to pass a levy that produces less money in 5 years than the day you put it on the ballot. They didn't do their work. But I want you to take uh this is a quick overview. This is how your property, your residential and egg values have grown um since uh 1994. Assuming a a fixed tax rate
093at 20 mills capped at 3%, one of the thoughts would be would this particular segment of your pot of your system grow over over time? Most likely the answer is yes, unless something really strange were to happen. So would the 20 mil floor if we set aside the the reality that it will cost your taxpayers more would the 20 mil floor at least adjust if you got there adjust to some degree with the rate of inflation? The answer is most likely it would income tax. So your income tax is driven by incomes of families. Um 1994 the same time frame the trend of growth there was 5.96% roughly a 6% rate over time. uh and the you know out there's a few you can see some recession activity in here co like sort of right
094in here but other than that pretty reliable no I tell every school district you'd never want to be all income tax because it's too unpredictable but you are approaching a billion dollars in total income of earnings of homeowners in this community >> you get this information is this for the district or >> this is for the this is for the school district this is from the State Department of Taxation. >> Yep. So, the State Department of Taxation with the up and down. >> Yeah. They they um when you do your tax returns, they have you put a code on your tax return for the school district that you live in. So, they just pull all the tax returns and they produce a report. >> Um >> Yeah. Yeah. That's the problem with tax. You're always
095chasing. >> Yeah. Yeah. I mean, it's so we'll get 2024 in the next couple of months and we'll add it to the table. Uh what I do, so this is partly just for predictive purposes. Do can we predict if you were predicting reliability on either one of those? In your case, I would say that it looks pretty reliable unless something really unforeseen were to happen. Uh I'm I don't say I'm not saying this to all the school districts, but in your case, either or or both would work well for you all. 20 mil floor and additional income tax or 20 mil floor or you know either way because you've got some growth there and you would at least maximize as much revenue growth as you could potentially maximize. I know that you all have an
096income tax and I know that you probably know all of this but it's helpful for those that aren't in the room that might be watching later. Uh quick update. 607 schools in the state of Ohio, 212 as of today have an income tax. So it's about 35%. Um of that 35% 148 have a traditional income tax like you all do. 30% have an earned income tax. That number is growing. And th this is the May ballot. This is the largest ever ballot that has income taxes on it. Was it 30? Is that >> It makes a lot of sense because you're you're not trying to run a property tax in November. >> No. >> The ballot also contains elimination property tax. >> Right. Right. >> Yeah. Perfect sense. >> It it makes perfect sense. Um
097you know, and I there's a few of my clients on here, more than a few. And then there's a lot that aren't, but um there I'm not going to pick them out, but there are some communities that are listed on here that will be disappointed in the long-term performance of their income tax. And but you know, maybe like to your point, Britney, they have no other choice. But if anything, this is at least giving you a sense of the the the direction the wind is blowing in. So, as people start talking about taxes, the news headlines now are, you know, tax, income tax, income tax. And it's amazing how many things people get wrong about income tax stuff. The newspapers are horrible. They get the how they work, who they tax, everything. They get it
098wrong. I did not I was not able yet to get the number of districts that are doing an earned income tax versus a traditional income tax which I've got to physically go to each of the board of elections websites and track them down. So when I have an extra >> interesting to see that and then to see the results >> I'm very curious. >> Well, by our next meeting I'll have both and we'll see see how yeah how it how it did. But um >> comparable districts are on this list. >> No, they're not. And most of our comparable districts didn't have >> and and you should know traditionally wealthier communities were not fond of income taxes. Yeah. So yeah. Uh but >> no I said surprising. >> Oh okay. Yeah. >> So on to
099the traditional income tax. Uh this is what you do have. It uh breaks down the the types of income that subject to the income tax. wages, salaries, uh, interest, dividends, unemployment. I tell you, for the clients I have that have a traditional unemployment never seem to really register with anyone until COVID. >> And in my school districts where uh they had a traditional income tax, like 40% of their residents were receiving some type of unemployment income. And when they found out they had to pay taxes to the school district, it was a it was an ouch for a lot of these really these these folks. Um but you know it is key because there if you as you look to it um pensions, annuities, IAS, capital gains, things that you already know as more and
100more people become aware of that and sensitive to it, they might be like um but one of the key things is that there is an advantage in that social security is not included in this category and uh social security and retirement are two separate buckets and they get treated differently. So you have a fair fair percentage of your residents that are receiving social security and they are exempt from paying their the tax for that. Uh I have multiple clients that started out with traditional income taxes. Their communities have aged and now they're asking the question, should we convert that to an earned income tax? So, your tax policy, it might say something along the lines of while we're currently in the the traditional income tax mode, we wouldn't rule out if our demographics warranted shifting
101to an earned income tax just so that it's explained that it would be you wouldn't say you would do it. You would just simply say it would be it would be an option to consider because it does afford this. I try to make this table where it's a little it does afford a tax break for the, you know, for a pretty large number of of taxpayers. But what is really fascinating when you break it down, Britney talked about income taxes being paid by individuals and not businesses. So you've got, and you all experienced this, you've got that 15% or so of business property, what would have been a property tax being shifted to individuals. So imagine you've got a whole pot of individuals that pay traditional. If you shift to earned, let's say 40% of
102that pot is receiving some earned income, that 40% gets shifted to the remaining people that are paying the tradition would have been paying sharing. So so the tax burden gets higher and higher and higher for those that would be paying the tax as an earned income tax. So they pick up the short uh the money for business, they pick up the money for people on retirement, but it's a policy matter. What you're simply saying is that you're shifting the burden of that. So you're not talking about the whole tax base, but just a piece of it. You're shifting the responsibility. So Fred, to your point, for those people that say, "I've already paid for my kids to go to school. I'm done." If you use at some point in the future, if enough people are
103saying that, you're saying, "Well, what we're going to do is shift this portion of our tax structure to people that are using the schools, which are most likely people that are earning income that would be subject to the tax." And so, >> unique about Granville is we have such a high unearned income that I think it's more than 50% of our traditional base is unearned. So we would have to replace our 75% with more than 1.5% correct to generate this income. >> Yeah, that's my point. Yeah, it would take a higher tax for you. >> Well, when we originally put on the earned income tax, it was 1.25, >> right? Yeah. >> Yeah. And that dynamic probably hasn't changed. >> Yeah. Yeah. >> Okay. So um we are going to wrap up and again my
104job is to get the wheels turning so that in our next meeting I'm going to start to hear I'm going to move more into the facilitation role and hear you hear your views a little more so I can begin drafting language. Uh I do want to meet with Britney to kind of get through the fund balances and identify some targets for those different items. Uh I wouldn't mind having a little conversation about because the policy will say if you have extra money, how should you do that? So be prepared to talk about that. Uh covering again the income tax usage uh rules. I did this for a group that was on the ballot for a bond issue and then they were like, "Well, we didn't know you could use an income tax to build a
105building." And I said, "Well, you can." They were like, "Oh, well, we wish we had known that." So, I want to make sure we cover that so you understand how that would have to work and then u and then start working on some of our long-term strategies. >> And David, are the long-term strategies will get will we get into the the policy conversation around, you know, what people typically want from a development standpoint, an NCA, a tiff, an abatement, a payment and l when do we get into that conversation? That's that >> those conversations are starting to occur >> In real time. So >> So yeah, so that's going to be our next meeting. >> The tutorial. >> Yes. We we'll we'll we'll sit down our Yeah. Our next meeting is going to be like
106what what what types of things can we do to prop us up for the future? So one of the first things is try to avoid using your own individuals taxes to get things done. So this incentive conversation will be on the next the next thing. So, it's our next meeting is more talking than this. >> Okay. >> All right. And I'm on time. >> Excellent. Thank you very much. >> Okay. >> We appreciate that. And Matthew, you can >> appreciate the um finance committee members who decide to join us. >> Yes. >> Thank you. Hi, >> Mr. H. Hi, Mr. Wolf. Hi. And >> we're going to take a minute. Thanks.