Property value increases don’t automatically translate to property tax hikes to the same degree. Nix’s Real Estate Director Mike Stein estimated in Middletown property taxes will increase 27% to 30% per $100,000 in value.
“The city with the least income per capita, per resident is being hit the hardest, our people can’t afford that,” Middletown Councilman Zack Ferrell told the Journal-News. “We need help from the county, we need help from the state, we can’t just sit on this accept it. Somebody that’s well off that’s one thing but our citizens live paycheck to paycheck. This is the difference between Ramen noodles and a healthy dinner.”
Properties statewide are reappraised every six years, and property values are updated every third year based on sales data. The shifts are reflected on tax bills the following year. Butler is in the throes of the triennial update.
Here’s how much values will jump
Nix said the tax commissioner’s office accepted her recommended value hikes for the following entities: Middletown (40%), Millville (43%), New Miami (31%), Sharonville (29%), Trenton (36%) and Lemon (48%) Milford (30%), Morgan (29%), Oxford (25%), Reily (27%), Ross (27%), St. Clair (25%) and Wayne (24%) townships.
The state rejected her proposed value increases and is recommending higher increases for the following entities: Fairfield (41%), Hamilton (36%), Monroe (41%), Oxford (32%) and Fairfield (36%), Liberty (40%), Hanover (38%), Madison (43%) and West Chester (39%) townships. Her recommended increases in those areas ranged from 27% to 35%. These increases have not been finalized yet.
When the average 42% increase was still a possibility, West Chester Twp. Finance Director Ken Keim calculated that total taxes on $100,000 of value would increase $147 for residents there.
Nix is suggesting a bold move to mitigate a “crushing” tax increase for some.
“We’re going to request that the local officials stick to their 2023 level of funding from their local tax levies and not accept the increased inside millage,” Nix said. “It won’t be a panacea, but it would show good faith because some people simply cannot pay these increased bills that are going to come from these value increases.”
She said she plans to visit the various taxing bodies to cull their support.
Alarm bells began ringing months ago
Butler County Commissioner Don Dixon sounded the alarm in March when the astronomical property value increases were announced and led an effort to fix the problem. State legislators representing the county and others tried to put a short-term “band-aid” on the problem — requiring a three-year average for property value calculations — in the state budget, but it was pulled out.
Sen. George Lang, R-West Chester Twp. told the Journal-News he is still hopeful they will be able to get the legislation passed this year to give taxpayers relief. The measure requires that the state tax commissioner give equal weight to the last three years worth of property sales instead of focusing on 2022. If successful the average value hike would drop to around 24%.
Dixon told the Journal-News any and all efforts to reduce the taxpayers’ burden must be considered, but Nix’s idea might be a hard sell.
“I think it has merit, but getting everyone to agree to that I think may be hard to achieve, but worth a try,” Dixon said. “But I’m not giving up on the legislative one yet, we’re not into that 2024 year yet and I still think we’ve got a shot at doing things differently.”
During the two “summits” convened to discuss the property tax issue, several solutions were examined, including local use of tax incentives to spur economic development. The two main incentives are tax increment financing (TIF) and residential incentive districts (RID).
When a RID or TIF is enacted, the value of the parcel is locked and value increases due to improvements are forwarded to the governmental in what’s called “payments in lieu of taxes” on the higher value. The schools are “made whole” by the property owner receiving the tax break.
Nix has said communities use these vehicles that siphon money away from providing government services, which prompts new levies. She said 80 new levies have been approved since 2008.
Tax incentives under scrutiny
Stein compiled a report that shows in 2022 the total taxable property value in the 11 taxing districts that have RID and TIF incentive programs was $17 billion and the total value exempted was $957 million. Together they garnered $51.7 million to use benefiting the areas within the districts they were created to improve.
West Chester Twp. has the highest exempted property value at $314 million, which represents 10.4% of the total taxable value in the township. The township has used TIF dollars to build just about every major capital project, like the Union Centre interchange at Interstate 75. They used nearly $25 million in 1994 to build the interchange and another $20 million in 2019 to install the new diverging diamond upgrade.
Keim ticked off a long list that included two fire stations, the library, numerous roads, the Muhlhauser Barn and other projects the TIF dollars bought. He said by using those funds they can rely less on tax levy dollars to provide core services.
Nix met with West Chester officials to discuss the TIF issue and found their TIFs “had produced so much growth and is an engine for them that we could see there was obviously benefit. We’re not so sure on the RIDs, if that provides an engine for growth.”
Liberty Twp. has by far the biggest value parked in RIDs at $145.6 million. Trustee Tom Farrell, who has been on the board for 13 years, told the Journal-News all of their RIDs were in place when he was elected and they have dissolved a few of them.
He said back when the RIDs were formed the county was apparently putting TIFs in place within the township, so the trustees started establishing RIDs so they could build roads to keep up with rapid growth.
“Liberty has been extremely conservative on its TIFs and RIDs, what we do have in place is there to make sure that we have the infrastructure to support the growth and to have the funding to support the infrastructure,” Farrell said. “We take the RIDs and TIFs very seriously and do not approve them unless they make dollars and cents to the residents.”
Middletown straddles Butler and Warren Counties and pulled in $3.4 million last year and $2.1 million so far this year from TIFs in both counties. 61.8% of the taxable value in Warren County is tied up in TIF accounts, but there virtually no residential property there.
Ferrell said without the use of TIF incentives the city would not be growing and adding much needed revenue.
“We have a $300 million development project that’s getting ready to start construction that wouldn’t have been possible without these TIFs,” he said. “It’s going to be our largest development off the highway and it’s something that’s predicted to bring 10,000-plus people a week to Middletown and estimated to create more than $1.2 million in income tax every year.”
Dixon has said there are many taxpayer relief options like capping property value increases at two or three percent, addressing the 20-mill floor for school funding and “increasing some exemptions the state has taken away.” However, none of those are quick or easy fixes and require a unified state legislature to pass.
The tax incentive programs are something they can review locally to make sure they aren’t harming taxpayers.
“A lot of the county has benefitted on those TIFs, RIDs somewhat, but some of the RIDs are suspect,” Dixon said. “I think when we look at them we’re going to find some that are generating a lot of money and it just stays in the RID because there’s nowhere to spend it but the taxes keep deferring. Some of those need to be looked at, probably done away with.”
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