This is part two of our four-part series on revaluations in Portage County. Read part one, three and four.
The Portager is offering a series of articles about the statewide property revaluation process. This article focuses on how the revaluations affect local schools, and why asking voters for additional tax levies remains necessary.
Those revaluations translate to higher property tax bills. Apart from disputing the tax hikes, which may or may not work, property owners have no say in the matter.
State law allows political subdivisions to collect up to 10 “inside” mills, with one mill being equal to $1,000 of assessed value. Locally, 2 mills go to the county, anywhere from 3.8 to 6.5 mills goes to the local school district, and anywhere from 1.3 to 4.2 mills goes to the township, village or city general fund.
The inside millage for any taxing authority can approach or equal 10, but cannot exceed it.
For instance, according to the Portage County auditor’s office, Atwater’s inside millage distribution is 2 mills to the county, 5.3 mills to Waterloo schools and 2.7 mills to the township, including 0.7 mills earmarked for the township road and bridge fund.
Garrettsville’s distribution is 2 mills to the county, 4.5 mills to Windham schools and 2.6 mills to the village. Kent’s distribution is 2 mills to the county, 3.8 mills to Kent schools and 4.2 mills to the general fund, including .3 mills each to the city’s police and fire pension funds.
Though higher property values do translate to higher property taxes, it is not a direct correlation. According to the county auditor’s office, property taxes are calculated on assessed value, which is 35% of fair market market value. Countywide, residents will see an average 15% to 16% property tax increase, at least as far as inside millage is concerned.
If a school, political subdivision or government agency needs more than the 10 inside mills would generate, they have to ask their voters to approve “outside millage.” That translates to tax levies that may or may not raise taxes.
Where does the money go?
About 70% of every property tax dollar funds local schools, and 80% of each school district’s budget is typically dedicated to salaries and benefits, Aurora schools Treasurer Bill Volosin said.
It’s not hard to see where district treasurers look first when school levies fail.
“If 80% of our budget is salaries and benefits, where do you think we’re going to make the cuts?” Volosin asked. “We can cut all the classroom supplies we want; it’s not going to change anything.”
Even with the newest Fair School Funding Plan — the Ohio legislature’s latest effort to comply with the Supreme Court’s 1997 directive to come up with a constitutional school funding formula — there is a breaking point even in Aurora.
“As our expenses are going up, and the only way we have to increase our revenues is to ask the people for more money, eventually the people are going to say, ‘no.’” Volosin said.
When voters say no
When voters reject school levies, school districts are faced with an Ohio law that prohibits school districts from operating in the red.
Three local school districts, one wholly in Portage County and two that mostly serve students in adjoining counties, are wrestling with that reality right now.
Ravenna schools
After Ravenna voters last November rejected a 5-year, 6.9-mill additional levy for current expenses, on June 22, 2024, the state placed the district in fiscal caution. The state auditor’s office requires such districts to file written proposals that eliminate potential red ink.
Ravenna schools produced its plan in August. To reach positive numbers, the plan calls for not filling some jobs left open by retiring staff, implementing district-wide reduction-in-force actions, scrutinizing outside service contracts, reducing and streamlining middle school sports options, eliminating some student clubs and organizations and eliminating high school busing, except for students with special needs.
“The Ravenna school district and board of education are working diligently to live within the means and circumstances that we have been given,” district Superintendent Ben Ribelin said. “While cuts have been made to live within those means, we are focused on quality instruction and positive experiences for our students and families.”
The district’s plan relies in part on voters approving Issue 33, a 5-year, 8.31-mill emergency levy meant to collect $157 million in Fiscal Year 2025 and $3.15 million annually in FY 2026, 2027 and 2028. Should the levy bid fail in November’s balloting round, the school district’s budget will be awash in shortfalls and the district may be downgraded to fiscal watch.
Under fiscal watch, district officials and the Ravenna school board would retain control, but would be scrutinized by the Ohio Department of Education and Workforce and the state auditor’s office. Even now, ODEW is monitoring district finances on a monthly basis and will continue doing so through the school year, Ravenna schools Treasurer Kristen Plagemen said.
Voter trepidation in light of revaluations is understandable, but “having a financially stable school district is really important to the future of the city and the community,” she added.
“We’ve already taken into account what we’ll be receiving in the inside millage with the reappraisals and, even after considering that, this is what is needed in order to give us financial stability for the next couple years,” Plageman said.
District voters need to understand that levies can only generate what they were originally intended to generate: no more and no less, Plageman said, underscoring that the district has not seen new tax money since 2005. Voters did approve renewing a permanent improvement levy in 2021, but those funds can only be used for building and non-staffing related expenses.
Regardless of revaluations, renewal levies do not generate more dollars than originally intended and do not raise property owners’ taxes. However, functioning on 2005 dollars in a 2024 market is simply unsustainable, she said.
Should any Ohio school district not come up with its own plan to address budget shortfalls, the state applies a “fiscal emergency” label. Districts earn that designation when their operating deficit for the current fiscal year exceeds 15% of its general fund revenue for the preceding year and the district has not passed a levy to eliminate the deficit in the next fiscal year.
Local control is lost as the state auditor appoints a commission to assume all or part of the board of education’s powers. The commission then develops a plan to alleviate the district’s financial crisis.
In a worst case scenario, districts may cut services and staff to state minimums: reducing the number of non-essential classes and programs, cutting advanced and AP courses and eliminating all but a few electives and course offerings.
Each cut reduces how prepared district students are for post-high school life, whether it be the work world or continued education.
“Our schools are being mindful where cuts are made so as not to impact student outcomes,” Plageman said.
“We will continue to strive for excellence and work to provide as many opportunities as possible while we work toward fiscal stability,” Ribelin said.
County Treasurer John Kennedy understands the school district’s funding difficulties, but the levy will be a big ask for the 255 property owners of Ravenna Township’s Chinn Allotment, whose votes may make a difference in the outcome.
The county is installing a sanitary sewer system to serve the entire allotment. Each parcel owner is to be assessed about $30,000, and some are looking at bills of $50,000 or more.
Though Kennedy said he has urged Portage County’s state and federal lawmakers to find funds to reduce residents’ costs for the Chinn Allotment sanitary sewer system, nothing is definite yet.
He characterized the increased valuations as the latest in a series of “gut punches” the allotment’s 255 property owners have endured, noting that their property taxes will likely increase 15 or 16%, “depending on the property and how much everything went up.’”
Mogadore and Springfield schools
The only other Ohio school district in fiscal caution is Mogadore, which straddles Portage and Summit counties and serves just over 200 Portage County students.
Despite the state having placed Mogadore schools in fiscal caution on June 30, 2023, district voters in March rejected a 5-year, 5.9-mill additional levy for operating expenses.
Mogadore schools has reduced busing to state minimums and cut its overall expenses by 5%. Six teaching and tutoring positions have been eliminated since May 2023, and the district expects to cut 5 to 13 more at the end of this school year.
The state auditor’s office placed Springfield schools, a mostly Summit County district that serves fewer than a dozen families in southwestern Suffield Township, under fiscal caution on Oct. 9, 2020, and under fiscal watch on Sept. 14, 2021.
The Springfield school district is the only one in Ohio under fiscal watch; Mt. Healthy schools in Hamilton County are under fiscal emergency. As of Sept. 26, ODEW does not list any other districts as being in fiscal caution, watch or emergency.
Voters in the Springfield school district will see three renewal levy bids on the November ballot. Earlier this summer, the school board eliminated five teaching assistants and recategorized a central office position from union to nonunion.
Politics and pupils
Though much of each property tax dollar eventually lands in local school district accounts, therein lies the problem: Even though the Ohio Supreme Court declared Ohio’s school funding formula unconstitutional in 1997, it still relies primarily on local property taxes.
State legislators have approved any number of fixes over the years, but none have been fully funded or implemented. The latest plan, dubbed the Fair School Funding Plan, marks a turning point, Volosin said. However, even this plan remains only partially funded.
The plan, meant to overhaul Ohio’s school funding system, includes two items that previous plans lacked, he said: a baseline per-child education cost and a stipulation that the money the state gives each district for each child actually follows the child.
Previously, if a child chose to attend a different school district or a charter/community school, the home district had to forward its share of state funding for that student — and whatever state funding the receiving district was allotted per student — to the receiving district.
Since wealthier school districts receive less state funding than poorer ones, that left the wealthier districts actually dipping into their bank accounts to finance a student that didn’t even attend the district.
“Under the old system, we had to pay out that money, and now we don’t have to deal with that. We don’t gain anything, we don’t spend anything,” Volosin said. “It will be the closest it’s ever been to a fair and equitable plan.”
The state, however, still funds public schools from the same budget line item as private school vouchers. It also raises the income levels families may claim to obtain taxpayer-funded private school vouchers.
That means an increasing number of wealthy Ohio families are able to use those tuition vouchers for their children who were already attending private schools, and that means there is less money left over for public schools.
Faced with more financial outflow, Ohio school districts — including those in Portage County — could have no choice but to ask voters to approve more school levies, which is a big ask when they’re already facing higher property tax bills.
Wendy DiAlesandro is a former Record Publishing Co. reporter and contributing writer for The Portager.