Playground at Bell Creek Intermediate
Levies, Reassessments, and You!
Like most of what we've looked into, this is complicated, so bare with us. The first thing we want to make very clear is that schools don't receive any extra money from the levy if property values increase from a reassessment after the levy is passed. Now, this doesn’t mean that your taxes won’t change or the school won’t get any more money. It just means that the school will get the same amount from existing voted levies after a reassessment as it got before. There are several factors at play that we’ll go into. First, for this to make sense, make sure you've read and understand the ‘what is millage’ section and we recommend this video with David Graham. It is on the next page as well. Also note that the numbers used in this explanation are all hypothetical.
Let’s start with the one tax that absolutely changes with a reassessment and the only amount of money the school gets that’s not as ‘fixed’ as the levies, the inside millage.
So a property is appraised at $100,000. The assessed value (taxable value) of that property is $35,000. The county is receiving 10 mils of inside millage a year from that property, totaling $350. The school gets 4.5 mils of that, totaling $157.50.
After the reassessment that home is now valued at $125,000. The assessed value becomes $43,750. The inside millage the county receives becomes $437.50 and the school now gets $196.88. From this property owner, the school is now getting $39.38 more a year due to the reassessment.
The reverse is also true. If the property value declined to $95,000 then the assessed value becomes $33,250. It’s inside millage drops to $332.50 and the school gets $149.63, $7.87 less a year. So, this is not always beneficial to the school.
To put this in perspective, last year a single child cost the school $10,970 to educate. (This number was reached by dividing the FYE 2019 total expenditures by the K-12 student head count. This can be found in the Budget section.) The state gave BSS $3,195 per student that year. $10,970 minus $3,195 is $7,775 per student that is covered by local taxes. So when you hear the Greene County auditor say that the total amount of money the school receives from inside millage during a reassessment is small, this is what he's talking about. An additional $40, or even a couple of hundred dollars from the pricier homes, does not do much to offset almost $8,000 a kid.
Now we can move on to the complex bit: levies. There are several levies on the books for various public services, but they all work the same way. HB920 affects ALL of them. Once voted in, that public service only ever gets that amount, with one exception, new developments, which is discussed in that section. What we are discussing here is how each property owner's share of the levy tax burden can change, thus altering how much that individual pays in taxes even though the school isn't getting any more money.
Increases or declines in local population will either spread the amount among more people or condense it among less. When the population increases there are more people to share the same bill. The reverse happens when there are fewer people. Think about it like an apartment rental. If you’re splitting a 3 bedroom with three adults who are all paying rent, then all three folks pay less in total. If it’s split only two ways both parties pay more and a single family would pay the most. The rent amount never changes, just the portion each person is paying.
How much your property is valued at also affects what your share of the tax burden is. After the reassessment, there are three possibilities. Your outside millage could decrease, remain the same, or increase. As we noted previously, if it changes, this is NOT because the public service is getting more or less in total. This is because the property reevaluation changed how much of that total amount your property is now responsible for. This is all based on averages and percentages. If your property’s value changed by the average amount that all area properties changed by, then your outside millage taxes stay the same. If your home’s property value goes up more than the average percentage increase for area properties, your share of the total goes up. If it drops below, then your share of the total goes down.
We’ll go back to the rental analogy to simplify. Let’s say that the three renters are paying based on how much of the apartment they’re getting. Rent is $1000 a month. The person in the master bedroom has the most space and pays $400 of it. The other two occupants pay $300 each in rent. All are still paying less than the $1000 total, but how that total is divided is based on how much space each person is occupying. After a reassessment, it’s kind of like what would happen if they swapped rooms around. One of them is now paying $300 instead of $400 because their room is now smaller. Another is paying $400 instead of $300 because their room is now bigger. And the last roomie is still only paying $300 because their room size never changed. As with the first example, the rent itself never changes, just how much each roommate is paying.