City of Euclid and Euclid City Schools Reach Settlement Agreement on Shared Municipal Income Tax

April 3, 2025

 The City of Euclid and Euclid City Schools are pleased to announce that a settlement agreementhas been reached regarding the Shared Municipal Income Tax.

This agreement marks the continuation of a long-term partnership and shared commitment to the community, ensuring critical funding for both the city and the schools. 

Based on a vote of the residents on November 8, 1994, the municipal income tax rate was increased from 2.00% to 2.85% with a portion of the tax increase (0.38%) to supplement the City’s general fund and a portion (0.47%) to be shared with the Board of Education for school district current expenses. The settlement resolves the lawsuit between the parties and provides clarity on the interpretation of the Shared Use Agreement and the distribution of tax revenue, which will continue to benefit both the city and the schools. 

Key highlights of the settlement include:

Continued Financial Support: The city will continue to pay the Board of Education 16.49% of the total income tax revenue collected from non-resident taxpayers and city residents whose income is not subject to any tax credit. 

Adjusted Revenue Sharing: The city will pay the Board of Education 30% of the total income tax revenue collected from residents who work outside the city and earn income subject to any tax credit, regardless of the amount of the credit. 

We would like to extend our gratitude to Cuyahoga County Common Pleas Court Judge Michael Shaughnessy for his guidance and encouragement towards a resolution that benefits the community and taxpayers. 

This outcome is subject to confirmation by both the Euclid City Council and the Euclid School Board, with meetings scheduled for April 7 and April 9, 2025, respectively. If approved, the settlement agreement will be executed by the parties, and a dismissal entry will be filed with the court ending the lawsuit. Both the Shared Use Agreement and the Settlement Agreement will remain in full force and effect under the agreed terms.

This settlement will maintain our shared commitment to protecting the best interests of Euclid and its residents. We look forward to continuing our collaborative efforts to make Euclid a great place to live, learn, work and visit. 

Superintendent Christopher Papouras - Euclid City Schools

Mayor Kirsten Holzheimer Gail- City of Euclid 

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