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OEC Says “Absolutely No Increase In Taxes” Is Not A False Statement — Dismisses Kettering Complaint

Yesterday, my complaint to the Ohio Election Commission was dismissed. The three members of the panel — Chuck Calvert, John Mroczkowski, and Harvey Shapiro –acting on the recommendation of the OEC’s Executive Director, Philip Richter, were unanimous in their decision. The panel found that there is no probable cause to believe that, in Kettering’s renewal levy campaign, Ohio Revised Code was violated. The panel meeting was held in Columbus.

Donna Dixon played the part of Maureen Dean iin Oliver Stone's film, "Nixon."

Donna Dixon played the part of Maureen Dean iin Oliver Stone's film, "Nixon."

My complaint, that the panel dismissed, was that the Kettering School levy committee got carried away and, in its zeal to spur public support for the levy, and in violation of Ohio Code, made statements that were false. But, according to the OEC panel, the statement that I cited as a false statement “There will be absolutely no increase in taxes as a result of this Renewal Issue,” is actually a true statement. Yikes, how could I have been so wrong? The panel said the statement is true, regardless that individual taxes will increase, because the statement can be understood to mean, “There will be absolutely no increase in the total amount of taxes collected as a results of this Renewal Issue.”

The Kettering Superintendent, Robert Mengerink, made the statement that was the focus of my OEC complaint in “The Blue Ribbon Report.” Dr. Mengerink did not appear at the hearing, but, he was aptly represented by a pert, dignified young woman, out of an Oliver Stone movie, who reminded me in her appearance of a young Maureen Dean. She is Miranda Motter, an attorney with the Columbus law firm, Bricker and Eckler. Ms Motter provided the panel with a seven page memorandum of legal argument. It makes for interesting reading. I’m posting it here as a PDF file. She also provided an affidavit of statements made by Dr. Mengerink — posted here.

In the memorandum, Ms Motter gives a lawyerly explanation of what makes a statement true or false. Motter writes (p.3), “A statement is not false where, even though it is misleading and fails to disclose all the relevant facts, the statement has some truth in it. Moreover, a statement that is subject to different interpretation is not ‘false.’”

The problem is, a statement that is misleading and that fails to disclose relevant facts is not the kind of statement that builds trust or that builds a long relationship. My point, that I tried to make to the OEC panel, is that a school district cannot reach its potential without public support, without public trust, and a public cannot be expected to support a system that misleads it. The temptation for a school district in a levy campaign to cheat, particularly in a renewal levy campaign — by withholding information or by giving misleading information — is great. The stakes are high. But this cheating, at best, makes only a short term gain for the school system and in the long term causes an erosion of public support. The Kettering case, I argued, was clear cut and provided an opportunity for the OEC to put all districts in Ohio on notice about how they should advertise renewal levies.

Ms Motter included in her memorandum this sentence, “To determine whether a statement is in fact false, courts utilize an objective standard, using the perspective of a reasonable reader.” I like the idea of a “reasonable reader,” and in my presentation to the panel I urged the panel to consider these facts from the perspective of a reasonable reader:

  1. The 6.9 mill levy had an effective tax rate of 6.9 mills when it was approved in 2004.
  2. In 2004 Kettering’s property tax base, when taxed at a rate of 6.9 mills, produced $8.2 million in revenue.
  3. In 2005, 2006, and 2007, Kettering’s tax base increased and, in order to raise $8.2 million in revenue, but no more, each year the effective tax rate was reduced.
  4. In 2008 the effective tax rate for this levy was 6.13 mills.
  5. But then the economy contracted, businesses and industry moved out of Kettering and the total tax base decreased. In order to generate the $8.2 million, the effective tax rate was increased to 6.16 mills.
  6. Kettering property owners, because of this effective rate increase, from 6.13 mills to 6.16 mills, had an increase in property tax of three cents for every $1000 of taxable property.
  7. Next year, because the total property valuation in Kettering has contracted even more, in order to raise the $8.2 million, the effective rate for this levy will increase again, from its current rate of 6.16 mills to probably 6.19 mills or more, and property owners, again, will see an additional increase in their property tax.

I thought that if the panel would take the point of view of a reasonable person, the statement, “There will be absolutely no increase in taxes as a result of this Renewal Issue,” would have to be seen as a false statement. Since a trend has already been established that this effective rate has increased, and since the conditions that caused this increase have worsened, it seem clear to me that it’s wrong to promise that this Renewal Issue does not pose a probable new tax liability to the taxpayer. But I failed to make that case.

I thought this aspect of the case, showing the statement to be false, would be the easiest part of the case to make, and that the reason my complaint would likely be dismissed would be some technical basis.

I’m surprised that this OEC panel, in its comments to me, seemed unconcerned that it is giving a green light to whatever exaggerated phrase a levy committee in Ohio might seek to use to promote a renewal levy. Kettering’s renewal levy promulgated big statements — “ZERO Increase In Taxes,” “Not a Penny More In Taxes,” “Absolutely no increase in taxes” — all not true. Because of the economic downturn, in order to generate the levy’s set amount, property taxes in Kettering, sufficient to fund this levy, in fact, will need to increase.

I stayed to hear the second case presented to the OEC panel and in this case the situation was reversed. In the second case, the Complainant was a school superintendent and the Respondent was a citizens group STOW CITIZENS FOR RESPONSIBLE GOVERNMENT from a community called Stow, in Summit County. This citizens’ group has a web-site with statements that the superintendent believes violates Ohio Law. One statement on the web-site says, “SUPERINTENDENT AND SCHOOL BOARD ABOUT TO DESTROY SCHOOL DISTRICT!!!” This is not the statement at the focus of the complaint, but, I imagine, gives the flavor of the dispute.

This Stow citizen’s group falls under special regulations because it was organized as a political PAC, and political PACS are governed by certain regulations. I don’t understand the legal basis for the Stow School Superintendent bringing a complaint to the OEC concerning this Stow citizens’ group. But after some discussion, the OEC panel, again followed the recommendation of their Executive Director. The panel members unanimously agreed — but this time the decision was opposite of the decision in my case. In the second case the OEC panel voted to find probable cause. The Stow citizen’s group now must defend themselves against the superintendent’s accusations before the entire OEC panel.

I was struck that in both cases, only one side was represented by an an attorney, the school district’s side. In both cases, the OEC panel sided with the school district and against the citizens.

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7 comments to OEC Says “Absolutely No Increase In Taxes” Is Not A False Statement — Dismisses Kettering Complaint

  • Eric

    But Mike, Shapiro nailed you.

    What was the date the levy passed?
    What was the date taxes increased?

    Oh. Oops. Nevermind. That was obvious. We missed it because of all the rhetoric instead of a narrative with a timeline.

    Mroczkowski had some sympathy for your concerns with the use of the word “absolutely,” but you got outlawyered in the muddle over “effective tax rate.” And the claim allowed multiple interpretations:
    – “There will be absolutely no increase in (total) taxes (raised) as a result of this Renewal Issue”
    – “There will be absolutely no increase in taxes (paid by any voter/property owner) as a result of this Renewal Issue”

    To win this, you would need an increase in taxes after the levy passage and the ability to make the case that the supt knew or should have known the increase was inevitable. And “increase” needs to mean “increase in any homeowners taxes.”

    Regarding the affadavit, “I … could not have known how the effective tax rate will impact each individual owner,” shows Dr. Mengerink still isn’t quite thinking this through: impact of effective rate is determined by multiplying with assessed value, and assessed value isn’t chaning two out of every three years. These are unfamiliar economic circumstances. The guy made a booboo. Your job was to point that out in the available time. Oops again.

  • Mike Bock

    Eric, I was glad that you were able to attend the probable cause hearing.

    As I wrote, I was surprised that the panel voted “No” on probable cause based on a rejection of my claim that Dr. Mengerink’s statement — “There will be absolutely no increase in taxes as a result of this Renewal Issue” – is a false statement.

    Shapiro’s approach to reject my claim, that Dr. Mengerink’s statement is false, was to argue, in substance, that we can’t know a statement about the future is false, because the future has not yet occurred. But the purpose of a probable cause hearing is to decide if probable cause exists to believe a statement is false, not to decide whether a certainty exists, beyond a shadow of doubt, that a statement is false. Shapiro seemed to ignore the whole concept that “probable cause” is based on what a reasonable person believes is probable — not what a reasonable person knows is certain. Noticing trends established in the present is a reliable and established guide to predicting the future, and Shapiro didn’t even attempt to process the fact that a trend has been established that the effective rate for this levy is increasing. So, I accept the report that, as you saw it, Shapiro nailed me, but I disagree. I would like to read the transcript to better analyze the exchange. My memory could well be repressing whatever it was that Shapiro said that impressed you.

    In rejecting the accusation that Dr. Mengerink’s statement was false, the Executive Director, Mr. Richter, did not cite Shapiro’s approach. Instead, Richter advanced the notion that Dr. Mengerink’s statement is not false because there exists one possible way to define “taxes” — as “total revenue to the school district” — that makes the statement true.

    I think you are wrong to describe Dr. Mengerink’s words as a “boo boo.” I don’t understand how you can justify making such a flip dismissal. I think, on the other hand, Dr. Mengerink’s words were very calculated. Dr. Mengerink is an expert who knows what he is doing. I cannot see his words as a simple nor innocent error, instead, to me, his words show an amazing contempt for democracy and contempt for the notion of “local control” of public education.

    You seem to agree that, yes, it is likely that if I had had first class legal representation, the results of the OEC probable cause hearing would have been different.

  • Eric

    Dr. Mengerink is an expert who knows what he is doing. I cannot see his words as a simple nor innocent error…

    I mentioned the affadavit. I believe it shows he has simply failed to connect the dots. Higher effective rate means higher tax bill four years out of six. All bets are off two years out of six when the property gets reassessed.

  • Eric

    You seem to agree that, yes, it is likely that if I had had first class legal representation, the results of the OEC probable cause hearing would have been different.

    No. After reviewing our earlier discussion, there’s no way to create a renewal levy that guarantees individual tax bills don’t increase. This forces the construction Dr. Mengerink claims: “There will be absolutely no increase in (total) taxes (raised) as a result of this Renewal Issue.” Other interpretations are impossible. A reasonable person doesn’t believe a report of a “car flying through an intersection” means the car was airborne. “Absolutely no increase in taxes” must refer to total taxes raised since it’s not possible to craft a levy that caps individual’s taxes.

  • Mike Bock

    Eric, you write, about Dr. Mengerink, “I mentioned the affidavit. I believe it shows he has simply failed to connect the dots.”

    It is nice that you want to have such a generous spirit. The affidavit is interesting, in that it does not seem like the words of someone who himself feels he made an innocent mistake.

    The problem is, as I see it, there is no basis in facts nor in common sense, that could explain your “belief” that Dr. Mengerink’s words simply amounted to a “boo boo.” It is not reasonable to me to think that, in his specialty, in this focus of his responsibility, that this acknowledged school expert “simply failed to connect the dots.” It is highly unlikely, to me, that an expert of Dr. Mengerink’s caliber, in the area of his responsibility, would simply make an innocent error. It is highly unlikely that it could be that all of the statements in “The Blue Ribbon Report,” overseen by Dr. Mengerink, by accident or happenstance, could urge public support for the 6.9 mill renewal levy. I find at least ten statements in “The Blue Ribbon Report” that urge a “Yes” vote on the levy, and zero statements in “The Blue Ribbon Report” that could possibly enlighten readers that the word “taxes” in this whole report is defined to mean “total tax revenue to the school district,” not “amount owed by individual property owners to support this levy.”

    Your “belief” that this is all an innocent “boo boo,” that Dr. Mengerink accidentally “failed to connect the dots,” to me, seems substantiated only by wishful thinking. My conclusion, on the other hand, that Dr. Mengerink, of course, knew exactly what he was doing, I believe is substantiated by common experience, by insight into Dr. Mengerink’s motivation, by the totality of Dr. Mengerink’s communication, by precedence set in other districts by other superintendents, and by, what I view as “common sense.”

    So, our disagreement may illustrate the problem of the “reasonable person” standard of determining the falsity of a statement. Two people, who both consider themselves to be “reasonable,” can see the same evidence and have opposite conclusions. It may illustrate how a different point of view results in different conclusions. You seem to take a point of view that I can’t agree with, that, because Dr. Mengerink’s goal was good — securing needed funding for Kettering Schools — you’re willing to excuse his tactics.

    As to your second comment. To my statement — “You seem to agree that, yes, it is likely that if I had had first class legal representation, the results of the OEC probable cause hearing would have been different” — you responded by saying “No.” Maybe you are right and even a Clarence Darrow could not have been successful, but I tend to think otherwise. I think the case was there to be made.

  • Eric

    Mike, we may be seeing a “false statements” complaint in a statewide race of national importance:

    “A section of the Massachusetts General Laws prohibits false statements against political candidates that are designed or tend ‘to aid or to injure or defeat such candidate,’ with a penalty of to $1,000 fine and up to six months in prison.”

    Tomorrow is the first business day the suit can be filed, so we’ll see. It’s also election day in Massachusetts.

    More here.

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