Butler County seeing large tax hikes following property value increases, new levies

How property taxes are calculated in Ohio is complicated, and a big boost in property value doesn’t always trigger large tax increases. Other factors that can fuel large increases include new taxes, charter millage, and whether a school district is at the 20-mill floor.

Butler County Auditor’s Office Real Estate Director Mike Stein said the highest tax bill increase was in Lemon Twp. within the Monroe School District with an average value increase of 62% and tax increase of 42%. The average value went from $137,000 to $221,000 and taxes jumped from $2,800 to $4,000 on average.

Stein said the lowest tax hike was in Fairfield Twp. within the Fairfield Schools where the average value went from $172,600 to $234,500 with an average 4.15% tax hike from $3,248 to $3,383.

The estimated windfall to schools, cities, townships and other taxing bodies in Butler County is estimated at nearly $78.3 million and about $60 million of that is going to the K-12 schools and $6.8 million to Butler Tech.

The largest windfall in Butler County was $10.8 million for the Lakota Schools, a 7.6% bump, one of the lower increases because the district is not at the 20-mill floor. Estimated revenues for the largest district in the county were $152.7 million which surpasses all others by almost $100 million.

Butler County property tax changes

Below are average property value and tax increases by community this year. Also marked are whether new levies, expired levies or the 20-mill floor impacted these numbers. These are the community-wide averages. Individual homes will see different amounts based on factors such as value, school district, and other assessments that may not apply to the whole jurisdiction.

Larger than other counties

Butler County communities are seeing much larger percentage tax increases this year than Montgomery or Greene counties, which also went through a reappraisal last year, according to a Journal-News analysis of all three counties’ data.

The average countywide residential tax increase in Montgomery County was 5.8% except in school districts below the 20-mill floor where the average hikes ranged from 8% to 16%.

The highest average community tax increase there was $655 in Miami Twp. because of the 20-mill floor and a new police levy, according to Mike Brill, communications manager. The lowest was Dayton which saw an average $83 tax decrease because the Dayton Public Schools bond levy rate was lowered.

Butler County property tax increases are also fueled by new levies, such as in Reily Twp. where new levies and other factors conspired to send the average tax increase up 36%.

In a recent summit among Butler County leaders to discuss how to address property tax increases, state Rep. Thomas Hall, R-Madison Twp. noted that much of it is driven by people passing levies.

Hall said in November there were 1,009 property tax questions on the ballot statewide and 858 were successful, according to lobbyists from the Department of Taxation.

“They shared that data with us to basically say you guys are complaining about property taxes, but overwhelmingly they keep passing,” Hall said.

State, local efforts

There are mechanisms in place to ensure taxpayers are generally protected from huge value hikes. Voted levies are capped at the amount taxpayers approved. Unvoted taxes are allowed to be collected up to a certain level, by Ohio law. That level is 10 mills for governmental bodies and 20 mills for schools.

Once a school district’s total current expense millage is reduced to 20 mills, it cannot be reduced any further, so tax revenues grow as property values increase. It only applies to operating levies not bond, permanent improvement, emergency, or income tax levies.

Only two Butler County school districts are above the 20-mill floor, Fairfield and Lakota. They had an average tax increase of 6% while the eight schools below the 20-mill floor are at 24%.

The General Assembly is attempting to tackle the property tax issue and formed a special Joint Committee on Property Tax Review and Reform. The 10-member panel wrapped up hearings a couple weeks ago after eight sessions.

A group of school district officials gave testimony in April including Northmont City Schools Superintendent Tony Thomas in Montgomery County. He told the legislators while many districts did receive a windfall it was tempered by reduced state funding.

“Since we are not at the 20-mill floor, (Ohio law) reduces the effective tax rate of our levies, and we will see no growth in funding from our voted mills. Therefore, the 36% increase in property values will increase our property tax revenue on our inside mills by $1.5 million,” Thomas said.

“While we appreciate the increase in property tax revenue, the effect of the increase in property valuations will reduce the state funding we are projected to receive by $1.18 million. The net effect will be less than a 1% increase in revenue. This does not keep pace with inflation and results in fewer services for our students.”

The joint committee had hoped to issue a report before they recessed for the summer, but missed that deadline. Several solutions have been discussed including addressing the 20-mill floor, several adjustments to the homestead exemption, a “circuit breaker” approach and the latest, a constitutional amendment that would cap tax increases at 4%.

Some officials locally have been working for a year trying to mitigate the high burden on taxpayers. Butler County Auditor Nancy Nix issued a challenge last summer to all taxing bodies, asking them to forgo the windfall.

The county commissioners and officials in Middletown and Seven Mile and Fairfield, Liberty and West Chester townships accepted the challenge saving taxpayers $8 million combined.

Nix also exercised her authority to roll back millage on bond levies in nine school districts saving an additional $22 million. She said they do it every time properties are reappraised so entities don’t “over-collect” but this year Stein was a little more vigilant.

“Because we had such extreme increases in values, he was more extreme in reducing those levy effective rates,” she said.