Property (Local Tax Levies), HB 920 & the 20-mill floor. 

All property owners in Butler County have either heard about the 2023 triennial update being discussed in the news or received a letter/postcard from the county auditor indicating the tentative new appraised value of their property. When property is reassessed, more than likely upward, you may or may not see an increase in your tax bill. Why? 

It’s complicated. Here’s an attempt to simplify it for us all. 

Local tax revenues are impacted by state law and Ohio’s Constitution. Property taxes are calculated based on the underlying value of the property. Since property values change over time, Ohio has a process in place to periodically reappraise every property. This is done by each county auditor every six years (along with a more simplified “update” every three years) and is mostly based on recent sales. Butler County, like other parts of Ohio, is experiencing historic property value increases based on a very vibrant Southwest Ohio economy, population growth, lack of housing stock, and outside investment in some parts of our county. 

It is important to keep in mind that district residents pay taxes on assessed values of real property. In Ohio, real property is assessed at 35% of its appraised or market value for taxation purposes; thus, taxpayers are taxed on 35% of their property’s appraised value. 

The important thing to know though, is that there is not a one-to-one relationship between property value increases and taxes. Over the years Talawanda Schools have not seen a large spike in taxes collected; that’s because Ohio enacted a law in the 1970’s that protects homeowners from a rise in taxes simply due to an increase in property values. It's called House Bill (HB) 920, and it works by reducing what is called the “effective millage”, or tax rate, so that when multiplied by the higher property value, the owner pays roughly the same amount as they did the year before, all other factors being equal. The School District also collects, in total, roughly the same amount as it did the year before the reappraisal 

Muddying the waters a bit, there is a small portion of the tax rate, called “inside mills” that does grow with reappraisal. It’s the first 10 mills (Talawanda Schools share is 2.19 mills) and represents only about 11% of this past year’s total operating mills in our District. 

The more complicated part is that not all areas and properties are reappraised and impacted the same. It’s all about how each property compares to the average increase. If a property is reappraised higher than the average, that owner will pay more taxes whereas a property that reappraised lower than average will experience a tax decrease. The school district receives roughly the same amount in total. The process is rooted in fairness and protection for all property owners and why it’s often called “equalization”.

Here is where it gets even more ‘congested’. HB 920 reduction factors apply to lower the effective tax rate for ‘voted levies’, offsetting the increase in property values, but only to a point. The tax reduction factor cannot lower the school district operating millage below 20 mills, often referred to as the 20-mill floor. Talawanda is currently on this 20-mill floor, which means the tax reduction factor does not necessarily offset the increase in property taxes. 

Butler County Auditor Nancy Nix has done a great job providing outreach and educational sessions for residents to better understand the property tax reappraisal process, including a calculator to help estimate your future taxes. It can be found by clicking THIS LINK. She also explains the process for how you can appeal the tentative value that has been assigned to your property. While the county is doing a great job trying to protect constituents, it can feel like it is pitting community members against local entities (especially school districts) who desperately rely on this money to provide critical services to the public, without having a firm understanding of the finances of each. 

Taxes in Ohio are very complicated, and it’s natural to be concerned when experiencing historic reappraisals. However, in Talawanda Schools, taxes have been capped over the years due to HB 920 and we have only captured slight increases annually (1.5%) due to new construction; which does not provide for any inflationary increases for operating our district. Add this to the fact that Talawanda’s last approved operating levy was in 2004, with a recent 5.7 mill levy failing in 2022, our amazing district is feeling the pressure causing us to make some very difficult decisions affecting not only our students, families and programs, but our staff as well. 

While we fully realize that the increase that will be seen in your upcoming property tax bill could/will create a hardship for you and your family, we want you to be aware of two (2) legislative bills currently being discussed (with potential votes as early as next week) that could have long term financial effects on Talawanda finances. 

Feel free to reach out to me with any questions, as well as, the auditor’s office if you feel your property valuation is inaccurate, as you play an important role in the reappraisal (and update) process. 

Shaunna Tafelski 

Treasurer, Talawanda School District 

tafelskis@talawanda.org 

513-273-3107