The Jan. 30 article titled “School tax challenge divides lawmakers by party” had omissions and misleading statements.
The County Auditors Association of Ohio released a memorandum opposing recent amendments to House Bill 126. The CAAO supported an earlier version of the bill that improved transparency and fairness, but now opposes the revised version , considering it too restrictive.
In the background, some school districts in Ohio have aggressively filed lawsuits against homeowners. In Mahoning County, for the last BOR filing period, 202 appeals were filed. There are six Mahoning County school districts that have filed suits. They filed 32 complaints and 40 counter-complaints, all against commercial properties. The CAAO advocates limiting a school board’s ability to file a complaint where the requested change is less than $100,000 or 10% of the assessed value set by the county auditor and further prohibiting the filing of complaints against owner-occupied properties and agricultural properties. These provisions would protect owners from being forced to defend their values and would limit commercial filing to material differences. School boards in Mahoning County have not filed aggressive complaints against residential properties, but school boards have in other parts of the state.
These measures would not result in a loss of income for the schools. Voted school levies generate local funding for schools. As the value of assets increases or decreases, the amount paid to schools does not change significantly. Tax rates are calculated by the county auditor based on levies. Increases or decreases in assessed values in a tax district would affect how much each taxpayer pays, but the net for schools would be much the same.
The CAAO also approves the moratorium on side agreements between school districts and landowners. According to your article, “It also prevents school districts from resolving complaints outside of county review boards.” As presented, this seems unfair, but as practiced, it is unfair to taxpayers and entities that receive tax revenue. After filing complaints with the Board of Review, the school districts reached agreements with the owner of the commercial building for direct payment to the school district in exchange for the complaint being dropped. The school district receives an ancillary payment equivalent to the lost tax revenue, the property remains in the tax base at a reduced value to the detriment of all other taxpayers, and all other entities receiving tax revenue do not receive a taxable value higher .
Currently, school boards can file an original complaint with the Board of Review prior to the tax lien date on which the sale occurred. This means that a landlord would be responsible for taxes incurred prior to owning the property. CAAO believes this is unfair.
A loophole in current law allows for transfers of property held in limited liability companies (LLCs). These transfers are made to avoid transfer taxes and hide the sale price of the property. The CAAO wants this loophole to stop. My office has tightened the documentation of these transactions and is reviewing each one to ensure they are compliant. Current sales information is needed to determine fair market values.
The auditor’s office prepares a reassessment in 2023, which takes place every six years. All 164,000 plots in the county must be assessed. These revaluations are based on current sales data, which is much more available for residential properties than for commercial or industrial properties. Documents filed by the Board of Education highlight commercial property valuation disparities that would normally be reviewed every six years. There is clearly a role for school boards in the process. Their role must be fair and transparent.
The county auditor is the secretary of the board of review and chief assessor for the county. In the future, do not hesitate to contact me with questions relating to this office. Framing this issue only in a political context did not illuminate the issues and led to misinformation.
Ralph T. Meacham, CPA, is the Mahoning County Auditor.