Over the next week, property owners will receive a notice of a new valuation on their property. This notice comes as part of Stark County’s sexennial reappraisal, as mandated by Ohio law.
There are two key components county auditors use in creating this new value — the characteristics of the property and the sales of property in any given community. Auditors know that someone’s home is likely their most valuable asset and take seriously our role of setting a value that reflects the market.
Auditors also know that with this increase in value comes the realization that property taxes will rise as well, and this is a worry for many of Stark County’s home and business owners. The property taxes a property owner pays are largely the result of the levies the voters have chosen to enact over time.
The formula for taxation in Ohio — commonly referred to as House Bill 920 — has been in place since the mid-1970s. Think in our country’s history of the time this bill was passed, a time of high inflation not dissimilar from what has been experienced in the past two years.
House Bill 920, when enacted in 1976, was designed to keep property taxes from increasing at the same rate as property valuation increases. A small portion of a property tax bill — historically 15% to 20% — would rise and fall as the valuation change occurred. The bulk of the bill — that based on voted levies — would stay fairly flat.
This was the effect of House Bill 920 and it has worked relatively well for the past 50 years. But its effectiveness in capping increases in property taxes with each reappraisal cycle has come to an end.
It has come to an end largely due to changes in school levy choices, specifically emergency and substitute levies and shifts in permanent improvement levies, that fall outside the calculations as contemplated by House Bill 920.
As a result, a super-majority of school districts across the state, including 13 of 17 in Stark County, benefit from additional increases in revenue as a result of having their property tax millage fall below a certain guarantee, called the 20-mill floor. The 20-mill floor guarantees each school district 20 mills of operating millage, excluding emergency and substitute levies.
Confused yet? I provide this background to illustrate how complicated the property tax structure in Ohio has become. And this is not to cast blame on our excellent local school districts.
Stark County has, on average, the lowest effective tax rate of the 10 most populous counties in the state. Further, since 1997 our schools have been forced to contend with an unconstitutional funding mechanism that is too reliant on property taxes.
Last fall, the legislature created a Joint Committee on Property Tax Review and Reform. A series of hearings were held this spring, with county auditors having a seat at the table. We await the results of this committee.
Meanwhile, county auditors continue to work with our legislators to discuss new ideas and support various legislative proposals to ease the burden of property tax increases that many of our homeowners experience. The Homestead Exemption, available to certain homeowners over age 65, has not kept pace with inflation and is worth less today in real dollars and as a percent of the average property tax bill than it was 10 years ago. Auditors encourage our legislators to provide more relief for our seniors.
The effects of the 20-mill floor have caused schools to disproportionally benefit from property value increases. Auditors encourage our legislators to address the unconstitutionality of the school funding formula, address the 20-mill floor, and reduce the burden on property owners in funding our schools.
County auditors are on the front line of confronting the realities of property tax increases in our state, as daily we hear from homeowners on the challenges they face. Many outside groups have lobbyists advocating for specific interests.
Auditors are advocates for the interest of fairness in our property tax system for all Ohio residents. I encourage each of you, just as I do, to reach out to your legislators and encourage them to put forward needed changes to Ohio property tax law.
Alan Harold was elected Stark County Auditor in 2010. He served as President of the County Auditors’ Association of Ohio in 2019 and was recipient of the Richard J. Makowski Award as outstanding County Auditor in 2022.