Thursday, February 05, 2009

Find the Error: it's glaring

See if you can find the glaring error found on page D-30 of Strickland's Executive Budget:

School districts that are at the 20-mill floor get revenue growth from 20 mills (2 percent) of property taxes on existing property when the property is revalued at reappraisal or update (every three years). School districts that are not at the 20-mill floor get growth only from their inside (unvoted) millage, which is typically only about 4.5 mills. On all the voted millage, the H.B. 920 TRFs act to reduce the effective rate of taxation so that there is no growth in revenue from the voted millage at reappraisal or update. This “all or nothing” growth in property tax revenue under the current school financing is not well understood by the public. A school district with 20 mills of property taxation that counts toward the 20-mill floor gets growth on 20 mills of tax when property is revalued. A school district with, for example, 22 mills of property taxation gets growth on its 4 or 5 inside mills, but no growth at all on its 17 or 18 voted mills.

I'll have the answer tomorrow.

There's at least one more glaring error that I will share on Friday. In the meantime, keep in mind that the above is the foundation of school funding in Ohio. If the budget analysts can't get this essential piece right, what can they get right?


Anonymous said...

DeRolph vs. State of Ohio was filed in 1991 Ohio’s system of funding education relies heavily on local property taxes, resulting in extreme differences in funding levels. It causes problems for poor districts—inadequate resources, crumbling facilities, and difficulty retaining quality teachers, and also has structural flaws that cause problems for others. The case was brought by a coalition of more than 560 of Ohio’s 720 Boards of Education, the Ohio Coalition for Equity and Adequacy of School Funding . This system has been challenged as being unfair, because the over-reliance on property tax results in a situation where children in different areas of the state have very different educational opportunities. Ten years after the DeRolph lawsuit was filed, this formula still has not been fixed. This formula determines how much money your local school district receives from the state: 1. Find the Total Base Cost. Start with the Average Daily Membership (ADM) 2. Multiply it by a Cost of Doing Business Factor (CODBF), which is different in each county 3. Multiply that number by the Per Pupil Base Cost ($4814 in Fiscal Year 2001) 4. Find the Local Share. Start with the Total Recognized Valuation of property in the school district and multiply it by 0.023 (23 mills). 5. Subtract the Local Share from the Total Base Cost to fi nd the amount of the State Share. Real property (land and buildings) has a true value, or market value (what you could sell your house for). Mills are an amount of money (a tenth of one percent), and are used to figure property taxes. A mill raises $1 for every $1000 of taxable property. So, if your house is worth $40,000, and $14,000 is taxable, one mill is worth $14 dollars. Up to 10 mills can be levied without a vote, those are called inside mills. Schools usually get 4-6 of those and the rest goes to local government. The levies you vote on are called outside mills.
The tax rate is how many mills you pay. If the tax rate in your county is 25 mills, you would pay $25 for every $1000 of taxable value on your property. With our example of a $40,000 house, it would be $350.
When property is re-appraised by County Auditors, the property value goes up. But a state law (HB 920) says that property taxes can’t go up without people voting on them, so tax reduction factors keep your tax bill where it was until the next levy. This gives us the Effective Tax Rate. Basically, your tax bill stays the same on VOTED levies, but since the property value has gone up, the millage rate is actually reduced.
In order to get any money from the State, a school district has to raise 20 mills locally. This is the millage Floor. The floor includes money raised for operating expenses, emergency levies, and JVS.
When school districts put a levy on the ballot to raise tax money, there are 4 kinds (plus the option of School District Income Tax).
• Operating levy—for current expenses
• Emergency levy—to raise a specific amount of money over a few years
• Bond levy—to pay debts on bonds (does not count as part of the floor —the amount they are required to raise locally)
• Permanent Improvement levy—for capital expenses (such as buildings and land—not part of the floor)
The Ohio Fair Schools Campaign is a statewide network of grassroots, citizen groups who are working toward real reform of the school funding system. For more information, visit our website at or call (740) 593-7970 or e-mail:

Jim Fedako said...

9:10 --

Nope. The question and answer are technical.

Anonymous said...

Socialistic funding of government schools (indoctrination centers). Why stop with just schools in a State. Some States are wealthier than others. Why not tax Ohioans and send that money to Arkansas or W.Va.? Oh, wait. That's what the Federal government does, doesn't it? Don't you think all children in Ohio should have ALL the benefits of the children in Upper Arlington, Bexley, Dublin, Powell, New Albany, etc.? Shouldn't residents of those affluent cities be taxed to afford less affluent children all the benefits that being children of the rich have? Shouldn't we all own polo ponies? Shouldn't all our children take vacations to Europe and Aspen? Shouldn't my neighbors be forced to supply me with enough money that my income is equal to their much larger income? I'm suffering here. This is unfair.