Kettering City Schools are asking voters to vote “Yes” on May 5 for a 6.9 mill renewal levy. The yard signs, around Kettering, say, “Vote YES, May 5, Kettering City Schools, ZERO Increase In Taxes.”

This advertisement, to me, says that there is an absolute guarantee that if this 6.9 mill renewal levee is passed, there will be a ZERO increase in a property’s “effective” tax rate. But, as I found out today, by talking with Marty Moore of the County Auditor’s Office, this claim is very likely not true. What actually is guaranteed is that the school district will continue to raise $8.2 million each year from this levy, regardless that property values in the school district might decline. But, in order to raise this guaranteed revenue, if total valuation of the district declines, then the “effective” tax rate, in fact, will go up in order to raise the $8.2 million.
Ms Moore says that, anymore, she frequently hears the question from property owners: “How is it that my property value went down, but my taxes went up?”
In Kettering, the total valuation of the District is declining and nobody, in the short term, believes that this slide in valuation will stop anytime soon. By approving this five year levy, it is a safe bet that voters are unwittingly approving an increase in taxes. This may be a small increase, but, it will be an increase, nevertheless. It is not ZERO, as the signs say. It seems to me, it is incumbent on school officials and the board of education members to correct the false claim that, by approving this 6.9 mill renewal levy, there is a guarantee of a ZERO tax rate increase.
The 6.9 mill Kettering School renewal levy, right now, raises $8.2 million by taxing at an “effective rate” of 6.162 mills. But, if property values decrease, this “effective rate” will need to increase in order to raise that same $8.2 million.
Kettering voters are being asked to agree to the proposition that, if needed, this current “effective rate” of 6.162 mills could increase to as much as 6.9 mills. If total Kettering property values diminish to the point that the 6.9 mills fails to raise the expected $8.2 million, then, since this is not designated as an “emergency levy,” additional increases in millage will not occur, and the school district’s revenue will decrease.
The ballot language Kettering voters are being asked to approve says, “A renewal of a tax for the benefit of the Kettering City School District FOR THE PURPOSE OF CURRENT EXPENSES at a rate not exceeding six and nine-tenths (6.90) mills for each one dollar ($1.00) of valuation … for a period of five years, commencing in 2009, first due in calendar year 2010.”
In order for the Kettering Board to make an authentic guarantee of ZERO increase in taxes, it would needed to have guaranteed that the current “effective rate” of 6.162 mills would never be increased. The board should have offered a replacement levy of 6.162 mills. The 6.9 mill renewal levy allows for a .738 mill increase — the gap between what the effective tax rate now is (6.162 mills) and what the effective tax rate could become (6.9 mills). Before the five years expire, it could well be, if total district valuation plunges, that approving this renewal levy, voters are agreeing, if needed, to allow taxes to rise .738 mills, a 12% increase, a long way from ZERO.
Someone told me, “It’s like, if I told my wife she could spend up to $1000 — I would have little hope that she would spend less.”
The 6.9 mill renewal levy can never exceed 6.9 mills — an increase of 12% of its current effective rate of 6.162 mills — but, still, a definite ceiling. But there is no limitation as to how much bond levies can increase. Kettering City Schools passed a bond levy in 2006 for 3.6 mills. It is now 4.5 mills. A bond levy guarantees a fixed payment amount each year. If tax revenues decrease because of decreased property value, the tax rate must increase so that revenue is sufficient to service the debt. Kettering voters in 2006 approved a school bond issue of 3.6 mills for the purpose of borrowing $102 million to pay for school facilities improvement. Ms. Moore says that, because of the decrease in total Kettering valuation, the 3.6 mills was not raising enough revenue to make the loan payments. The tax rate was increased by 25%, to 4.5 mills.
In 2007, according to Ms Moore, the total valuation in Kettering was $1,424,287,702; in 2008, the total valuation was $1,396,394,393; in 2009, the total valuation was $1,354,338,690. This is a 4.9% decline in three years. Lower valuation means tax rates must increase, and the tax increase is shown in the “effective tax rate.” The 6.9 mill tax, in 2006 had an effective rate of 6.14 mills; in 2007 it had an effective rate of 6.13 mills; in 2008, it had an effective rate of 6.16 mills.
In 2007, the owner of a home appraised at $100,000 would have paid tax on $35,000 at a rate of $6.13 per thousand for $214.55. In 2008, a taxpayer with a home appraised at $100,000 would have paid at the rate of $6.16 per thousand for $215.60, an increase of $1.05. By approving a renewal level, voters are agreeing to allow yearly incremental tax increases to continue.
Approving this levy, because of the trend of decreasing property values — Ms Moore emphasized the impact of GM leaving the Kettering District — it is a safe bet that taxes will continue to creep up. The maximum a $100,000 property could be taxed, if this renewal is approved, is $6.90 per thousand or $241.50, an increase of $26.95 per year over what a $100,000 property is taxed today.
I supposed that Kettering Schools would have an up to date web-site that would have a detailed explanation of the 6.9 mill renewal levy. There is not a peep. I supposed that the web-site would have PDF files of reports made at the last board of education meeting. Nothing. I called the Board Office and was connected to the Treasurer, Steve Clark. I had an long telephone conversation with Mr. Clark. He was very gracious. He said that I could come into the board office and pick up copies of reports. He said that according to state law, the school district is only required to keep a video copy of its meetings.
I said that I was surprised that a school district that prides itself on greatly exceeding state minimums in its overall school program would think it appropriate that state minimums should guide the policies and procedures it uses to inform and engage the public.
I did go into the board office today and met with Mr. Clark. I also met Ms Julie Gilmore a board member — who brought a paper copy of her report to the office, so I could have a copy. Ms Gilmore’s report tells how the money is spent. It has a lot of interesting statistics that originally I had intended on analyzing in this article, a topic I may return to at some later time.
The secretary said she would make a PDF and e-mail me. And she did. I had assumed that Ms Gilmore’s report would be on the internet so that any Kettering voter who might want to read it would have easy access. Instead, in order to get her report, I had to make a phone call, wait a day, get in my car, find the board building, find an office down a labyrinth of hallways, and make a second request to Mr Clark before Ms Gilmore was telephoned.
It shouldn’t be so hard for a citizen to get information. I expressed my frustrations to Ms. Gilmore and she was very gracious, saying, that yes, it would seem a good idea to put on the web-site Board reports given in board meetings, and that she would discuss the matter with other board members.
I met with Mr. Clark and Ms. Gilmore today, before I had my long telephone conversation with Marty Moore in the Auditor’s Office and discovered the facts I report in this article. So, we didn’t discuss the facts in this report. I intend on giving Mr. Clark and Ms Gilmore, and other Kettering school officials, a link to this article and ask for their response. In my view, Kettering school leaders are simply wrong to approve levy advertisement that promises that the 6.9 mill renewal levy will result in a ZERO increase in taxes. This is a tough realization for me, since I normally am a big supporter of schools. I need to consider seriously if this is one school levy I should vote against as a means to express my disapproval of misleading advertisement.



































