News Pickerington Schools Seeks Bond Issue That Won’t Increase Tax Rates By District Treasurer/CFO Ryan Jenkins The Pickerington Schools Board of Education voted 5-0 on Monday, May 23 to place a $89.93 million bond issue on the Nov. 8 ballot. This was after the county auditor certified to the district that a bond issue of this size over a maximum maturity of 37 years would be assessed at 2.8 mills. But forecasted increases in tax year 2022 residential tax values are anticipated to allow the county auditor to collect a lower overall tax rate, even if the bond issue passes.
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At the May 9 board meeting, as the District Treasurer/CFO, I spoke about how the increase in taxable values impacts the overall tax rates and the proceeds needed to pay off district debt. The basic calculation to compute residential taxes is to multiply the tax rate times the taxable value of a home. The tax rate is measured via a rate called a mill. A mill is equivalent to $.001, or $1 of taxes for every $1,000 of taxable value. In aggregate, the district will collect a stream of
revenue that is equal to the tax rate multiplied by the taxable value of all property in the district. Our conversations with the county auditor have allowed us to estimate that the value of residential property in the district will increase by nearly 25-30 percent. We are all aware of the dramatic spike in demand for homes in our region, and this has translated into higher home values for all of our residents. The average taxpayer may think that when values increase by 25-30 percent, taxes will increase by the same amount, but that’s not how Ohio law works. As taxable values increase, Ohio House Bill 920, which was passed back in 1976, dictates that tax rates decrease by an amount that will keep aggregate voted tax collections on existing properties the same year over year. So as values are forecasted to increase by 25-30 percent for existing homes, tax rates for voted levies will be reduced by law so that aggregate tax collections for the district remain the same each year. This also means that the district’s debt service tax rates will decrease, because the increased values allow a lower tax rate to generate enough tax proceeds to pay back district debt. The county auditor currently assesses 7 mills on existing properties to generate the proceeds to pay existing debt service, including annual principal and interest payments. Seven mills would equate to $7 annually in taxes for every $1,000 in taxable home value or, as most property owners would think about it, $245 anwww.pickeringtonmagazine.com
