Ohio homeowners could pay more school taxes

May 22, 2014 by

The Ohio Senate passed a proposal Wednesday that would outlaw schools’ right to challenge commercial property owners who attempt to pay lower taxes, a move that could leave homeowners either paying more or being asked to approve more levies, or both.

The move came this week as the Senate made dozens of policy and tax changes to an appropriations bill. Many changes involved taxation, including a move to speed up incremental reductions in the state income tax rate and give additional tax breaks for small businesses.

One change eliminates school districts’ right to challenge property owners, mostly commercial, who try each year to lower property values by $50,000 or more, thus reducing their share of local support for education.

The change mirrors a bill introduced 15 months ago in the Ways and Means Committee by Sen. Bill Coley, a Butler County Republican.

Coley, unavailable for comment Thursday, also is the vice chair of the Senate Finance Committee, which made the alterations to the appropriations bill.

Drastic property reductions affect every taxpayer’s bill. These reductions often occur when commercial property is sold at a discounted price. The buyer then seeks to lower the value listed with the county auditor to match the low sale price, thus reducing the tax burden.

“If they’re paying less, then someone else is paying more,” said Nordonia Hills Superintendent Joe Clark, who added that challenging property values keeps property tax collection fair.

He said schools need the opportunity to argue that some properties are worth more, and should be taxed more. “If you have additional revenue coming in by challenging these property values, in this case we’re getting $2 million more over the past four years, it makes it so that we don’t have to ask for more money as frequently and so soon. And it spreads the burden.”

Charter schools are not affected. Often run by for-profit companies, they receive a guaranteed amount, regardless of local taxes.

For schools like Nordonia Hills and Akron, which collect more money as property values increase, abolishing the ability to challenge valuation decreases could mean less funding and more trips to the ballot.

“I don’t know why anyone thinks that’s equitable,” said Jack Pierson, Akron’s treasurer.

Pierson said there’s no guarantee that the county board of tax appeals would side with any school that challenges a loss of funding due to property value adjustments.

“It’s a challenge,” he said. “If the district is wrong and the board of appeals determines that the district’s challenge is wrong, then the property value stays the same. Why should a taxpayer continue to receive a benefit that they should not be getting?”

“I don’t understand the logic in abolishing the challenge,” he said.

Many school districts pass levies that require the county auditor to collect a set dollar amount each year, regardless of individual property value fluctuations. They’re called emergency levies.

“When values get reduced for commercial properties in those cases, then yeah, the auditor has to make sure that a set amount of local taxes are collected,” Pierson explained. “So, the tax rates would go up for homeowners.”

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via Ohio homeowners could pay more school taxes under Senate proposal – Local – Ohio.

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