Issue 44 is a combination earned income tax and bond proposal that would reshape district at every grade level.

NORTH CANTON  With two different funding mechanisms under a single tax issue, the North Canton City School District's Issue 44 might be the most complicated issue on the Nov. 7 ballot.

Here's some help to sort it out:

What is Issue 44?

Voters in the North Canton City School District will cast a single vote for a combined tax issue that includes:

• A 3.99-mill bond issue that will expire in 34 years;

• A 0.75 percent earned income tax that does not expire.

Superintendent Jeff Wendorf has said that school administrators and board members decided to seek both the earned income tax and the bond issue because they address two linked issues: financial stability and facilities. He said passing the bond issue alone would mean the district still would have to cut staff and programming. Passing a tax issue for only operating funds would mean the district would continue to sink money into aging buildings, and it likely would jeopardize the district's ability to pass a second levy for facilities in the near future, Wendorf has said.

School leaders said the decision to seek a permanent earned income tax follows the North Canton tradition of seeking continuing levies and helps the district better plan for future programs and improvements. Wendorf said last week he believes the tax should not be considered a "forever" tax for individuals because they will stop paying it once they retire and stop earning income.

Who would pay the tax?

Anyone who lives in the North Canton City School District, which includes the city of North Canton and parts of Plain and Lake townships.

Under the bond issue portion, the owner of a $100,000 home would pay an additional $140 a year in property taxes through December 2019.

For the earned income tax, a school district resident, whether living in the city or township, who earns $50,000 a year in income would pay an additional $375 a year under the earned income tax portion of the proposed levy.

The average North Canton district resident, with a home valued at $170,000 and earning $61,000 a year, would pay $238 a year in new property taxes and $457 a year in income tax.

Retirement pensions, interest, capital gains, rental income, annuities, unemployment, income from estates, incorporated businesses and Society Security benefits would not be subject to the proposed earned income tax.

Note that there is no reciprocity with the school district earned income tax as there can be with municipal income taxes. For example, North Canton school district residents who work in Canton, where the income tax is 2 percent, would pay 2.75 percent in income tax if Issue 44 were approved. Existing reciprocity agreements for municipal income taxes would not be affected.

How much would the tax generate for the school district?

The 3.99-mill property tax is expected to generate $55 million that would help cover the district's $74.4 million share of its $108.4 million facilities project. Passage of Issue 44 would allow the district to tap into $34 million from the state facilities commission.

The earned income tax is expected to generate $5.8 million a year, of which $4.4 million a year would be used for school operating expenses through at least 2023, $1 million a year would be put toward the facility project and $360,000 a year would be set aside of maintenance of the new facilities, as required by the state.

How would the district use the money generated?

The money for the facilities project would pay for:

• $23 million worth of renovations to Hoover High School, including upgrades to the building's heating, ventilating and air-conditioning units, electrical and security systems, handicap-accessible structures as well as a roof replacement and classroom reconfigurations.

• Construction of two new elementary schools for students from kindergarten to fifth grade, with one located in the northern portion of the school district and the other located in the southern portion. Roughly $1 million also is included in the bond issue to purchase additional land and to install utilities, such as sewer, for the new northern school, as the district's current school sites aren't large enough to hold a new facility. District preschool classes also would be located in one of the new elementary buildings.

• Construction of a new middle school that likely would be located on the high school campus.

• Demolition and asbestos abatement of the existing five elementary and intermediate schools.

• $1 million for a new bus garage. The district cannot close the doors of its current garage to repair buses because the vehicles are too long.

• $1 million for upgrades to the athletic complex on Seventh Street NE to address handicap accessibility and gender-equity issues.

The proposed facilities project, which was formed over four months with input from roughly 500 community members, is expected to be finished within four years after planning begins, and the new buildings would be expected to last the district at least 40 years.

The $4.4 million would be used to boost district operating funds that have been depleted by the phase out of the tangible personal property tax, flat state funding and unfunded state mandates, such as the College Credit Plus program on which the district spends more than $230,000 a year for textbooks and utilities to allow eligible high school students to take college-level classes and earn college credit.

District Treasurer Todd Tolson said the district would not spend all $4.4 million immediately, but would put some in a reserve to make sure the money would last as long as possible. He estimates the tax would maintain district operations through at least 2023.

He noted that with an income tax the district would realize whatever gains occur if residents' income rises. Over the past decade, the federal adjusted gross income for the North Canton City School District has risen by 2.7 percent, according to figures from the Ohio Department of Taxation.

What if Issue 44 fails?

"The planning team would get together and talk about a next try and what that next try would be," Wendorf said during a community forum last week.

Without new operating money to collect in 2018, the district would need to reduce its operations by nearly $2 million heading into next school year. The district already laid off six teachers last school year.

"We want to try to maintain the integrity of the classroom, but $2 million is a lot," said Wendorf, who noted that 80 percent of the district's budget is for staffing.

While Wendorf declined to commit to specific cuts that might be made, he said options the district is considering include: pay-to-participate fees, busing reductions, increased class sizes and eliminating non-required classes with low attendance, such as some Advanced Placement classes.

Reach Kelli at 330-580-8339 or kelli.weir@cantonrep.com.

On Twitter: @kweirREP