The first paragraph in an article, by Jill Kelley, in today’s DDN states, “Kettering and Oakwood each have a levy on the ballot for Nov. 8. Both are renewals, and neither would increase taxes.” The DDN would do a service to its readers to more fully explain how renewal levies actually work, and, explain that current trends indicate that the approval of these renewal levies will mean the effective rates for property taxes in Kettering and Oakwood will increase.
In Kettering, the school district is urging voters to renew a 0.6 mill “permanent improvement levy.” This levy was originally approved in 1987. According to Ohio law, a levy can never raise more tax revenue than its original amount. Because the total property value in Kettering has increased since 1987, to avoid generating revenue in excess of the legal limit, over the years the effective rate of this 0.6 mill levy gradually decreased. It is now .458860 mills. But the total property value in Kettering is now decreasing, and, if the levy is renewed, to maintain the same tax revenue, this effective rate may be increased, if necessary, back to its original 0.6 mill amount — an increase of 31%. (It can never exceed the original ratified amount of 0.6 mills.)
The total increase over the last four years in the effective rate of this levy has been only about 1%, but voters should understand that the trend is upward. Voters should understand that, by approving this renewal, they are agreeing to further increases in the effective rate of this levy.
In Oakwood, voters are being asked to renew a 2.72 mill levy, originally ratified in 1991. Its effective rate is now 1.449251 mills, so renewal means, if total property values in Oakwood sink to the 1991 level, the effective rate of this levy could go back to 2.72 mills — potentially, a whopping increase of 88%. Such a big change seems highly unlikely. But the trend is upward. Since 2008, the effective rate of this tax has increased 1.4%.
In July, 2009, I officially complained to the Ohio Election Commission that false advertising was being used to illegally promote a renewal levy in Kettering. I was offended that the leaders of the Kettering school district, who knew better, seemed intent on deliberate deception when they went way overboard in urging voters to support a 6.9 mill operating levy renewal with phrases like “not a penny more,” and, “absolutely zero increase.”
Ms Kelly probably didn’t do enough research to understand the matter. But, when she wrote, about the current Kettering and Oakwood renewal levies, that “neither would increase taxes,” she was misinforming the public. Once a levy is established, its effective rate is on a sliding scale. In order to maintain a fixed amount of tax revenue, when the total property value in a district decreases — as is the established trend in both Kettering and Oakwood — the “effective tax rates” must increase.
If officials want to guarantee voters that their effective tax rates will not increase, instead of renewal levies, they could offer replacement levies, pegged at the current effective rates. If Kettering offered a 0.46 mill levy to replace the current 0.6 mill levy that is expiring, the revenue to the school would not change in the first year. Likewise, Oakwood could offer a 1.45 mill levy to replace the current 2.72 mill levy that is expiring. Then, if the total property value of the community decreased, tax revenue for those levies would also decrease. A system of tax revenue instability may not be in the public interest. But, if our elected officials want the revenue stability provided by renewal levies, they should show transparency, they should educate the public. They should not hide the fact that, in a time of economic downturn, renewals cause effective tax rates to increase and thus increase the tax liability for individual property owners. And our local newspaper, rather than misinforming, should explain the details of these tax issues.
See: OEC Says “Absolutely No Increase In Taxes” Is Not A False Statement — Dismisses Kettering Complaint, July 17th, 2009
Mike, thanks for this posting. Both the Kettering and Oakwood boards, as well as the DDN are guilty of lying. You point out that, indeed, these levies would raise taxes. And then the media keeps wondering why they keep losing readers and viewers.