This page documents what I've
learned about the basic laws that govern Ohio local tax issues. It's factually correct to
the best of my knowledge, but I'm not a lawyer. My intent is
to promote understanding and discussion of the basic concepts, to help
judge how to vote on ballot issues. Please e-mail me
if anything I've presented as fact is wrong.
|Tax Levy "Mills"
mill = an annual tax of $1.00 per $1,000 of assessed property value.
Assessed property value = 35% of
appraised property value, as determined by the county auditor.
(The auditor appraises all property at 100% of its market value every
six years, and makes an interim update on the third year after each
reappraisal. The auditor sets your "assessed value" at 35% of
that appraised market value).
|So, for property with an
appraised market value of $100,000, one mill
equals $35 in annual taxes:
|x 0.35 = assessed value:
|x $1 per $1000 assessed value =
|But, that annual tax
liability is reduced by 10% for residential or agricultural
property, and by an additional 2.5% for owner-occupied
Revised Code section
||$35 x 0.90 = $31.50
||$35 x 0.875 = $30.63
also provides an additional homestead reduction for persons who are
disabled or age 65 and older, but it's complicated. For purposes
of this website, I use the owner-occupied residential property rate for
tax calculations, so each mill of property tax = $30.63 in annual taxes
per $100,000 appraised property value.
|"Inside" vs. "Outside" Mills:
Article XII, Section 2 of the Ohio Constitution
limits property taxes to one percent of value (ten mills) for all state
and local purposes, but also allows additional taxes to be
levied "outside of such limitation" when approved by voters.
Beavercreek's ten "inside mills" are allocated as follows:
|Beavercreek School District:
other property tax levies beyond those ten mills are "outside mills,"
and must be approved by voters.
||Reduction of Outside Mills
1976, the Ohio legislature enacted House Bill 920, which
the effective millage of voted property tax levies to be reduced in
proportion to rising
property values, to protect property owners from paying more taxes on
a given levy than they originally approved. The law
was subsequently incorporated into the Ohio Constitution
as Article XII, Section 2a(C)(2):
|"With respect to each
voted tax authorized to be levied by each taxing district, the amount
of taxes imposed by such tax against all land and improvements thereon
in each class shall be reduced in order that the amount charged for
collection against all land and improvements in that class in the
current year, exclusive of land and improvements not taxed by the
district in both the preceding year and in the current year and those
not taxed in that class in the preceding year, equals the amount
charged for collection against such land and improvements in the
|The Ohio Revised Code,
Section 319.301 contains the procedures for determining the tax
reduction percentage, but also provides a partial exemption for school
district levies. Paragraph
(E)(2) of that section prevents school levies from being reduced below
"two percent of taxable value," or 20 mills. Known as the "20 mill floor,"
that provision partially protects school districts from facing a fixed
income while costs rise over time. Voters could approve
additional levies beyond those 20 mills, but the reductions would then
apply again until the effective millage was gradually reduced back to a
total of 20 mills.
In addition to the House Bill 920 reduction,
the effective millages for emergency
levies are also reduced in proportion to new development,
so that the
dollar amount collected remains the same even when the overall size of
the tax base expands. Effective millages for construction
bonds are reduced as necessary to limit the amount
collected to the principal and interest due on the
A renewal levy
extends the duration of a previously-approved levy, rather
than letting it expire. The effective millage continues to be
reduced year after year as described above, so renewal levies do not
generate more income for the taxing authority even if property values
have risen or new development has expanded the tax base.
A replacement levy
resets the effective millage of a previously-approved levy to its
original level. If a levy was originally approved at 5.9
for example, but had been reduced to 4.0 mills over time, replacing it
would set the millage back up to 5.9 and apply it to the new property
values and the new size of the tax base. After that, it would
begin to be reduced again as described above.
county auditor administers the reductions. The following
documents show the effect of those reductions over time, for
can look up the current effective tax rates for your property or any
other property on the Greene
Click on "Auditor - Real Estate Information," look up the
property you want, and click on "Tax Dispersal/Levies."
more information, contact the Greene
County Auditor's Office.
|Ohio state funding for public
Ohio's school funding
system rests upon the principle that the state and local
school districts should share the cost of public education.
The state determines the amount of its share
using complex rules described in
Ohio Revised Code
section 3314.08. The basic state formula is
Average Daily Membership
x Base Formula Amount
x Cost of
Doing Business Factor
= Estimated total cost
for a given school district
Estimated total cost for a given school district
= State funding for a given
|Formula Average Daily Membership:
Student enrollment, with some weighting factors applied.
Students in regular classes each count as one.
Kindergarten students each count as one-half.
Special-needs students each count as more
than one, by various degrees depending on the nature of their situation
|Base Formula Amount Per Pupil:
Each year the state determines a dollar figure to
approximate the cost of an adequate education per student per year.
That base cost figure is the same for all school districts in
|Cost of Doing Business Factor:
Each year the state determines a
multiplier for each county in Ohio, to approximate the extra cost of
doing business in areas with higher costs of
The state's calculation of each community's ability to
contribute to the total cost of public education in their school
district. The local contribution amount = (total assessed
within the school district) x $0.023.
The state's calculation of the local contribution amount
assumes that as the total assessed property value in a community goes
up, school district property tax revenues will also go up, so the
state's share of the total cost can therefore go down. But as
outlined above, revenues from
voted levies do not
go up. The state reduces its support by an amount of extra
local tax revenue that taxpayers do not pay and school districts do
not receive. That problem is known as
Court ruling that the system is unconstitutional:
In "DeRolph vs. State of Ohio," a
coalition of more than 500 local school districts sued the state,
charging that the state's funding system was not "thorough and
efficient" as required by Article VI, Section 2 of the
The case worked its way to the Ohio Supreme Court, which
heard variations of the case four times between 1996 and 2002, with the
Ohio Legislature attempting to fix the system in between each hearing.
The Court's final ruling reaffirmed its first ruling, finding
that the system is still not thorough and efficient for a variety of
reasons, including the following:
For information on the current status of the Legislature's efforts to comply with the Supreme Court's direction, contact
Representative Kevin DeWine at firstname.lastname@example.org, or via mail at:
- Insufficient funding for
an adequate education
- Insufficient funding for school
building construction and repair
- Insufficient funding for
- Too much reliance on local
- Structural deficiencies, such as
the phantom revenue problem
Honorable Kevin DeWine
Ohio House of Representatives
77 South High Street
Columbus, Ohio 43215-6111
The school funding system and court case are more complex than
I've outlined here. See the following for additional information: