In 1989, the Ohio General Assembly passed Senate Bill 28, a law which gives local boards of education renewed authority to place income taxes for school purposes on the ballot to be voted on by the residents of the school districts. This authority also existed in 1982 and 1983 but was replaced by the General Assembly. Ohio Revised Code sections 5748.02 through 5748.06.

A school district income tax may be approved for any specific number of years or for a continuing period of time. An income tax issue can be placed on the ballot only twice in any one calendar year. A school district income tax with a duration of more than five years may be repealed by voter initiative. Repeal efforts can take place only once in any five-year period. Income taxes with duration of five years or less are not subject to voter repeal.

The proceeds of an income tax can be used for any purpose for which property tax proceeds may be used. An income tax may be levied for any amount that district voters are willing to approve, as tax may be levied at .25%, .75%, 1%, 1.25%, etc.

The income tax for schools is paid by individuals residing in the school district, estates of school district residents and unincorporated businesses located in the district that file Ohio individual income tax returns. Corporations are not subject to the tax.

The income tax is not affected by the tax reduction factors in House Bill 920, thus providing an income source for schools which grow with inflation and as the economy expands. Income taxes have been passed since 1989 in 113 school districts. Of these, 82 are local school districts. Five school districts are also currently levy income taxes that were authorized in 1982 and 1983, bringing the total number of districts levying an income tax to 118.

Ohio School Finance Handbook, 1996-97 edition