He is angry that the school district has opposed these revaluations, saying he doesn't understand why the school district spends his own tax dollars to oppose his tax reduction request.
Part of this has to do with the technicalities of a provision in Ohio law often called "HB920," after the 1970s legislation which causes the dollar amount of property taxes collected to remain constant on the set of parcels in existence when the levy was passed. The original purpose of this legislation was to prevent rising valuations from automatically raising taxes, which at the time were particularly burdensome for folks in poor urban neighborhoods that were being regentrified, such as The Flats in Cleveland.
So if that original set of parcels were given a market value of $1 billion by the County Auditor, and a property tax of 1 mills were passed, the amount of money generated by that levy would be:
Tax = ($1 billion * 35%) * (1/1000) = $350,000In other words, property collectively worth $1 billion would generate $350,000 in property taxes if a 1 mill levy is passed. The 35% is the fraction of a property's value which is considered taxable.
Let's say that 10 years later, those same parcels would have risen in value to $1.25 billion, as determined by the County Auditor. HB920 would still restrict the total tax collected to $350,000. This is implemented by way of a "Reduction Factor" applied to the tax calculation.
In this case, the reduction factor would be 0.800000, applies as follows:
Tax = ($1.25 billion * 35%) * (1/1000) * 0.8 = $350,000All this works in the other direction as well - when property values decline. Let's say that instead of going up 25%, property values went down 25%, to $750 million:
Tax = ($750 million * 35%) * (1/1000) * 1.333333 = $350,000This same calculation is applied to every parcel in the school district. But over time, individual properties do not necessarily change in valuation as the same rate as the whole district. Some may have greater increases, and some may have decreases. All get the same reduction factor applied, and in the end the total amount of tax collected remains the same.
Here's the subtlety built into this: when one property owner is successful in getting their valuation reduced, the consequence is that everyone else has their property taxes increased in order to keep the total amount collected constant. As the value of one property is decreased, the overall Reduction Factor applied to everyone has to be increased to compensate.
So who represents the "everyone else" when a property owner files an appeal for a reduction in valuation?
In most cases, it's the school district. As with so much of our legal process, the various sides in a case present their arguments to an impartial "court," who listens to the arguments and renders an opinion. Whether the case is a capital murder or a property revaluation, the theory is that justice is best reached when opposing parties argue vigorously, and an impartial judge makes the final call.
That's what's going on here. Nothing evil or unfair - just the wheels of justice turning as designed.
But someone has convinced some of our lawmakers that this approach needs some tweaking. Language has been inserted into House Bill 483, the midterm budget bill, modifying section 5715.19 to prohibit parties such as school districts from opposing reappraisals unless the reappraisal was requested by the property owner.
In other words, if the County Auditor changes the valuation (remember all the arguments about the valuation of Nationwide Arena?), the school district has no right to argue in opposition.
Who then represents the interests of the property owners who will have their taxes raised as a consequence? No one.
Contact your state legislator if you think this isn't fair. For those of us in the Hilliard School District, this is: