Tax Levies Explained: Julie Joyce-Smith, Real Estate Manager, Butler County Auditor s Office April 8, 2015

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1 Tax Levies Explained: Julie Joyce-Smith, Real Estate Manager, Butler County Auditor s Office April 8, 2015

2 Millage Types Unvoted Millage or Inside Millage: approved by Budget Commission and cannot exceed 10 mills for any taxing district Voted Millage or Outside of the 10 mill Limitation: approved by popular vote

mills for any taxing district Voted Millage or

3 What is a Mill? A mill is $1.00 per every thousand dollars of 35% value Tax Calculation Formula : 100% True Market Value X 35% /1000 X Effective Rate or effective mills = Annual Estimate of Tax * *less any qualifying credits such as Non Business Credit (formerly known as 10% rollback); Owner Occupancy Credit (formerly known as the 2.5% credit); or Homestead Credit*

X 35% /1000 X Effective Rate or effective mills = Annual Estimate of Tax * *less any

4 Inside Millage Fairfield Twp.29 mills General Fund 1.0 mill Road & Bridge Guaranteed millage with no voting necessary from populace / not affected by reduction factors Initiated by HB 920

5 (A03) Inside Millage 10 Mill Limitation Fairfield Twp Fire Dist / Fairfield CSD (A05) Inside Millage 10 Mill Limitation Fairfield Twp / Northwest SD 1.92 Butler County 1.29 Fairfield Twp 6.79 Fairfield CSD = mills 1.92 Butler County 1.29 Fairfield Twp 6.33 Northwest SD = 9.54 mills** **increasing the inside millage for Northwest SD may cause another overlapping district to exceed 10 mills**

79 Fairfield CSD = 10.00 mills 1.92 Butler County 1.29 Fairfield Twp 6.33 Northwest SD = 9.

6 Outside Millage Fairfield Twp 5.9 mill Police Levy additional levy voted in 11/07/ continuous Outside Millage Fairfield Twp Fire District 5.0 mill Current Expense replacement levy voted in 11/04/2008 continuous may only be used for Fire expenses & limited to just the A03 taxing district **Outside Millage can be affected by State calculated reduction factors**

7 What are reduction factors Percentages that reduce a gross rate to a lesser rate or effective rate Purpose to eliminate revenue growth that would otherwise result from appreciating real property values Applies to voted fixed rate levies Allows for growth if additional property is added to the district such as new construction House Bill 920 is the basis of the current system (Excerpt from DTE power point Voted Property Tax Levies 4, 7, 2010) Serve as inflationary factors that protect the taxpayer in times of value growth on appreciating real property value Serve as inflationary factors that protect the taxing authority in times of declining real property values. Helps to ensure the taxing authority gets as close to the estimated revenue stream without exceeding what was approved by the voters

DTE power point Voted Property Tax Levies 4, 7, 2010) Serve as inflationary factors that protect the taxpayer in times of value growth on appreciating real property value Serve as inflationary

8 Levy Types (Outside the 10 Mill Limitation) Fixed Rate Levies Millage (rate) may never exceed what was voted. May fluctuate up and down over time but never exceeds voted millage amount. Fixed Sum = only for school bond issues & substitute levies. Typically tied to building a new building (think bricks and mortar) Fixed Sum levies are primarily used for issues where a bond or debt has been sold and the school must meet a certain payment every year for a specific length of time.

Fixed Sum = only for school bond issues & substitute levies.

9 Fixed Rate Levies (Outside the 10 Mill Limitation) Current Expense Special Purpose Examples: Fire Police Road Bridge Parks Library Mental Health Issues see ORC for full list

10 Fixed Sum Levies (Outside the 10 Mill Limitation) Emergency (school districts only) Substitute (school districts only) Conversion (school districts only) Bond (debt related) think bricks and mortar Not subject to reduction factors

districts only) Conversion (school districts only) Bond

11 5.0 Current Expense Fire District - Timeline Estimate: August 14, 2008 Certification for 5.0 mill replacement levy Grand Total township value $423,688,940 (35% value) Used 2007 values or current values as prescribed by DTE Revenue Estimate = $2,156,920 annually (including PP reimbursement) Voted & passed 11/04/2008 (goes in to effect 2009 tax year / payable 2010) Current: GT township value $417,908,490 (35% value) 2014 Values / payable 2015 Current millage = 5.0 (unreduced by reduction factors) Revenue generated for 2014 / pay 2015 = $2,089,542 (PP reimbursement no longer in effect) (-$67,378) deficit based on what was voted and requested by township in November 2008

annually (including PP reimbursement) Voted & passed 11/04/2008 (goes in to effect 2009 tax year / payable 2010) Current: GT township value $417,908,490 (35% value)

12 Economy & Impact on Values & Rates Ohio s current levy system was designed for constant growth. Current method requires levy estimates be given for the current year. By the time a new levy goes into effect the values are often stale by one year. In the case of an early renewal or replacement, the values can be 2 years old see the 5.0 current expense example. The housing market crash of the mid 2000s was unforeseen and unprecedented. As a result, many levies have been negatively impacted by loss of total valuation. Thus resulting in less revenue than estimated and creating budget deficits.

In the case of an early renewal or replacement, the values can be 2 years old see the 5.0 current expense example.

Property Tax Levy Law. Mike Sobul, Treasurer Granville EVSD OSBA Capital Conference November 13, 2012

Property Tax Levy Law. Mike Sobul, Treasurer Granville EVSD OSBA Capital Conference November 13, 2012 Property Tax Levy Law Mike Sobul, Treasurer Granville EVSD OSBA Capital Conference November 13, 2012 Constitutional Restrictions O. Const. Art. XII, Sec. 2 imposes two primary limitations on real property