The Lakewood Local school board has a tough decision to make on Monday about a November ballot issue.

The Lakewood Local school board has a tough decision to make on Monday about a November ballot issue.

The board is expected to discuss its options.

"We are one of the hardest-hit school districts in the state, as far as loss of tangible personal property tax," Superintendent Jay Gault said.

Gault said the district stands to lose about $3.5-million in revenue with the loss of that tax.

Through House Bill 66, the tangible personal property tax of "general businesses, telephone and telecommunications companies and railroads" will be eliminated completely by 2011, according to information from the state.

"For the vast majority of businesses, the last bills were due last November," said John Kohlstrand, spokesman for the Ohio Department of Taxation.

A "hold harmless" period will allow school districts to be "fully reimbursed for lost revenue," according to the state.

Kohlstrand said the state is diverting 70 percent of a new commercial activity tax to pay for the "hold harmless" payments. He said those payments would continue through 2011 and would begin to decrease until 2018. The 70 percent of the new commercial tax will continue to be diverted for school districts, but Kohlstrand said that after 2018, it is unclear how the money would be divided among school districts.

"We knew it was going away," Gault said of the tax. "When we passed the last levy, we hoped that would take care of about half (of that loss)."

The district's voters passed a 5.8-mill operating levy in March 2008.

Gault said the district is aware of the hold-harmless period, but the reality is that the district's budget continues to decrease.

"We're still getting a little bit from the state, but it's not close to what we were getting," he said.

Kohlstrand said the hold-harmless payments are based on 2004 property values and taxes to be paid in 2005.

"Our system is not adjusted for inflation or an anticipated increases in values," Kohlstrand said.

The Lakewood school board is scheduled to meet at 7 a.m. Wednesday, July 29, at the district office to consider its options. The board office is at 525 E. Main St. in Hebron.

Gault said the board would have to determine if it should place any measure on the ballot. If members decide to move forward with a ballot initiative, they will have to determine whether they should try a property-tax levy or an income-tax levy.

Gault said they might have to consider an 8- or 9-mill property-tax levy.

According to Cindy Haas of the Licking County Auditor's Office, an 8-mill levy would generate $2,877,530 annually and a 9-mill levy would generate $3,237,220 annually. She said the district formally requested information on an 8.9-mill levy, which would generate $3,198,530.

Gault said he couldn't estimate what an income tax might generate. He said the board would have to consider those figures and the two different types of income tax. One would tax only earned income and wouldn't affect such groups as senior citizens, who receive retirement benefits but do not actually have any "earned income." The other would tax all income.

"It's a difficult time to be talking about levies," Gault said. "(But) we have to do something."

At least two other school districts in Licking County also are considering November ballot issues: C-TEC (Career and Technology Education Centers) and North Fork Local Schools.

C-TEC's board of education voted in a July 20 special meeting to put a 1-mill operating levy on the ballot. Information from the school states the district has been operating on the original 2-mill operating levy since 1974.

The money would be used "to retain quality training programs for the adults and high school students of Licking County," according to information from the district. C-TEC has made cuts recently and enforced furloughs and pay freezes for staff.

North Fork is considering renewal of a 1-percent tax on earned income. The board's next meeting is scheduled for Aug. 17.