An income tax was examined as a school-funding option in 2002 and again has come before district residents and officials.

An income tax was examined as a school-funding option in 2002 and again has come before district residents and officials.

New Albany-Plain Local Schools' finance committee is looking into funding options for a 20.7-mill emergency operating levy that expires in 2009, in addition to a permanent improvement levy and possible bond issue, to deal with overcrowding.

In a meeting earlier this month, the finance committee learned about funding options -- primarily income tax and property tax levies.

The district has used property tax levies in the past. This option taxes all property owners within the district and currently accounts for about half of the district's operating revenue.

District treasurer Brian Ramsay estimated the district will need a property tax levy replacement of about 26.83 mills to sustain current school programming.

A 26.83-mill levy would cost about $822 per $100,000 home value, or $2,465 for a $300,000 home annually. These numbers do not include inside millage or any other levies or bonds currently being collected.

An income tax could offer another option.

According to Dick Maxwell, a school-funding expert who spoke at this month's finance committee meeting, the district has two income-tax opportunities.

A traditional income tax would tax all income earned by residents of the district, including income from pensions and capital gains. A new option, however, allows the district to tax only earned income.

Ramsay estimated the district would need a 2-percent traditional income tax levy or 3.25 percent income tax on earned income.

If a two percent income tax is chosen, it would cost $1,400 for a resident who makes $70,000. A 3.25 percent income tax on earned income would cost $2,275 for the same resident.

While the finance committee has several options to consider, one committee member asked others to think about the make up of the community.

According to 2005 income tax returns from the district, 30 percent of the community makes more than $100,000 per year.

The other 70 percent of the community makes less than $100,000 annually: 11 percent of the district residents make less than $10,000, 15 percent make $10,000 to $30,000, 17 percent make $30,000 to $50,000, 18 percent of the district make $50,000 to $80,000 and 9 percent makes $80,000 to $100,000.

With a cross-section of residents to consider, the finance committee will also have to consider the pros and cons of levies and income taxes.

An income tax collects funding from income, which will rise with inflation.

"An income tax is for growth," Maxwell said earlier this month. "You could be on the ballot less."

Using an income tax would mean a decline in district revenue from local businesses, but all property owners would still pay property taxes on the state guaranteed "20-mill floor."

The district could also use a combination of property tax levy and income tax.

"Several school districts have passed an income tax in complement to a property tax," Maxwell said.

The New Albany-Plain Local school board will have the final word on how funding from the emergency levy will be replaced. The finance committee is expected to give a recommendation to the school board in June.

The finance committee's next meeting is at 6:30 p.m. May 1 at the Jefferson Room in the high school, 7600 Fodor Rd. The facilities committee is expected to make a presentation at the meeting.