Over the next week, property owners will receive a notice of reassessment of their property. This notice is part of Stark County’s six-yearly reassessment as required by Ohio law.
There are two key components that county assessors use in determining this new value: the characteristics of the property and real estate sales in a given community. Assessors know that a person’s home is likely their most valuable possession and take our job of setting a value that reflects the market seriously.
Auditors also know that with this increase in value, property taxes will also increase, and that is a concern for many home and business owners in Stark County. The property taxes a property owner pays are largely the result of levies that voters have passed over time.
Ohio’s tax formula – commonly referred to as House Bill 920 – has been in effect since the mid-1970s. Think about the time when this law was passed, in our country’s history, a time of high inflation not unlike that of the past two years.
House Bill 920 was passed in 1976 and was designed to prevent property taxes from increasing at the same rate as property values. A small portion of the property tax bill – historically 15 to 20 percent – would rise or fall with the change in value. The bulk of the bill – which was based on the enacted levies – would remain relatively unchanged.
This was the effect of House Bill 920, and it has worked relatively well over the past 50 years. But its effectiveness in limiting property tax increases with each reassessment cycle has been exhausted.
This end is largely due to changes in the level of school levies, particularly emergency and replacement levies and changes in levies for permanent improvements that are not included in the calculations under House Bill 920.
As a result, an overwhelming majority of school districts across the state, including 13 of 17 in Stark County, benefit from additional revenue increases because their property tax millage falls below a certain guaranteed amount, known as the 20-mill floor. The 20-mill floor guarantees each school district 20 mills of operating millage, excluding emergency and replacement levies.
Confused yet? I provide this background to illustrate how complicated Ohio’s property tax structure has become. And this is not to blame our excellent local school districts.
Stark County has, on average, the lowest effective tax rate of the state’s 10 most populous counties. In addition, since 1997, our schools have been forced to contend with an unconstitutional funding mechanism that relies too heavily on property taxes.
Last fall, the Legislature created a joint committee to review and reform the property tax. Several hearings were held in the spring, including county auditors. We await the results of that committee.
In the meantime, the County Auditors continue to work with our legislators to discuss new ideas and support various legislative proposals designed to ease the burden of property tax increases experienced by many of our homeowners. The property tax 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 percentage of the average property tax bill than it was 10 years ago. The Auditors are urging our legislators to provide more relief for our seniors.
The impact of the 20-mill limit has caused schools to benefit disproportionately from property value increases. The auditors are calling on our legislators to address the unconstitutionality of the school funding formula, address the 20-mill limit, and reduce the burden on property owners to fund our schools.
County auditors are on the front lines of dealing with the realities of property tax increases in our state because we hear from homeowners every day about the challenges they face. Many outside groups have lobbyists who represent specific interests.
CPAs are advocates for the fairness of our property tax system for all Ohioans. I encourage each of you, as I have, to reach out to your legislators and encourage them to propose the necessary changes to Ohio’s property tax law.
Alan Harold was elected Auditor of Stark County in 2010. He served as President of the County Auditors’ Association of Ohio in 2019 and received the 2022 Richard J. Makowski Award as Most Outstanding County Auditor.
