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Property tax decrease to hit school districts

All of Butler County’s 10 districts projected to receive less money.

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1:08 AM Monday, January 30, 2012

By Steven Matthews

Staff Writer

While local taxpayers will see a drop in their tax bills this year, it also means school districts will take a hit in the revenue they receive from the county.

Each of Butler County’s 10 school districts are projected to receive less money in inside millage tax collection in 2012 than they did in 2011, and to make matters worse, tax delinquency rates are not included in those figures, a JournalNews analysis found.

“Any time government entities see drops in revenue, you’re going to have concern on their part,” Butler County Auditor Roger Reynolds said. “We’ve been in communication with them since 2009 about the reducing values — not only what we’re forecasting in commercial and residential values, but also the impact it will have on their revenue stream.”

A month ago, Reynolds released a property value update, which is required every three years. The 2011 update dropped residential property values on average in the county 4.3 percent from 2009 and 2010.

The greatest declines in residential property values were in Middletown (8 percent) and Hamilton (6.9 percent).

According to the auditor’s office, levies comprise up to 80 percent of a taxpayer’s bill, which means a reduction in value won’t mean a proportional decrease in taxes because the tax rate has been increased to cover any shortfall to the taxing authority. The only proportional tax relief from the reduced value of property is found in the inside millage portion, which is 15 percent to 20 percent of an entire tax bill, depending on the taxing district.

Middletown City Schools will see an estimated drop of nearly $325,000, while the Hamilton City School District’s impact is a little more than $275,000.

“We’re not getting hammered on huge amounts, but it’s a concern,” Hamilton Treasurer Bob Hancock said. “And we’ve been dealing with slightly declining revenues from the state level. When all revenue streams go flat on you, that’s when you have problems because you’re going to have inflationary growth. We think we’re on solid financial footing for the foreseeable future, but we still have to watch our dollars every day.”

Hamilton received a total of $17.4 million in property taxes for fiscal year 2011, and Hancock said the district is projected to receive $17.25 million this fiscal year. The district’s operating budget is expected to drop from $73.5 million to $71.6 million this fiscal year.

Middletown received approximately $27.5 million in property tax revenues in fiscal year 2011 and expects to receive about $26.8 million this fiscal year, according to Treasurer Kelley Thorpe.

The district is also losing out on about $500,000 in delinquencies, Thorpe said. Middletown has a tax delinquency rate of 14 percent, second-highest in the county to New Miami (16.4 percent).

“We’ll pull through this,” Thorpe said. “With our budget cuts last year ($5.1 million), we’re in a good position this year. But we’re looking at the accumulated effect down the road. Half a million is not a huge hit, but what does that mean for us in two or three years? Those are the kinds of questions we’re looking at as far as our budget process for next year.”

Lakota Local Schools in Liberty and West Chester townships has the biggest change in property taxes to be collected this year, with an expected decrease of more than $854,000. New Miami is at the bottom of the list at $8,600.

Lakota Treasurer Jenni Logan said the district has made about $10 million in cuts for this school year, and because the levy in November was rejected by voters, it is now looking at a projected $9 million in additional cuts.

“Of course, any loss to this district right now, it hurts,” Logan said, “because we are financially in a crisis mode here, and so every dollar that we lose is felt even more currently.”

Fairfield City Schools will see the second-most drop in projected revenue at nearly $450,000. On top of that, Treasurer Nancy Lane said the 6.5-mill operating levy that passed in November will now generate about $8.8 million annually instead of the projected $9.2 million due to the decline in property values.

Fairfield has an annual operating budget of $75 million.

“The target is always moving,” Fairfield Superintendent Paul Otten said. “Every month, someone is moving that target, and it tends to be moving down. ... It’s another example of how poorly schools are funded and how quickly things can change. We pass the levy, things look good for at least two years, and now the game’s changed. It’s another shell game, and we keep losing shells.”

Ohio Department of Education spokesman Patrick Gallaway said that while the way schools are funded is complicated, the state encourages districts to find ways to save money, including sharing resources, such as transportation and IT services.

“It’s an ongoing challenge, whether the economy is good or bad,” Gallaway said. “You still want them to be very frugal in how they’re spending it and what they’re spending it on.”

Contact this reporter at (513) 755-5113 or steven.matthews@coxinc.com.

In our schools Levy dollars

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