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Butler County property values going up 42% on average after state tax ruling

My home’s value has shot up. Now what?
Posted at 11:54 AM, May 03, 2023
and last updated 2023-05-03 11:54:08-04

Contrary to early estimates, the Butler County property valuations are going up an average 42%, and local leaders and state lawmakers are vowing to fix the problem following a summit on Monday.

County Auditor Nancy Nix’s office estimated early on in the triennial reassessment process the state tax commissioner would order a 24% value hike, but the figure actually is 42% after the recommendation was handed down on Friday.

Her real estate director, Mike Stein, told the group, “What the state is taking into consideration is only the sales data. They’re not looking at anything else, like the outside economic factors that are factoring into those increases at this point,” and it appears they are relying heavily on 2022, not the past three years.

Stein told the Journal-News on Tuesday he has been talking to the tax commissioner’s staff and the overall increase might actually be 39%, but they won’t know “where the final numbers shake out” until the end of the year.

After State Tax Commissioner Patricia Harris declined an invitation to discuss the estimate jump in property values, Commissioner Don Dixon fired off a “call to action” email to state senators George Lang and Stephen Huffman and representatives Jennifer Gross, Thomas Hall, Sara Carruthers and Rodney Creech.

“It was our intention to have a meaningful dialogue with the tax commissioner to find a reasonable solution to ensure our homeowners and businesses remain viable, affordable and to maintain our quality of life,” he wrote. “We believe it’s time we take the tax commissioner’s simple solution and get state government involved to remedy this unfair appraisal process.”

Huffman was the only legislator absent from the “summit” where they discussed how they think Harris and her office appear to be deviating from the law by putting too much weight on sales from last year, instead of data collected for the last three years.

Rep. Creech, who represents parts of three counties, said his phone “started blowing up” as tax commissioner directives have been released.

“One of the things I think we need to realize is taxes are important, taxes are very important to our local communities and our state, but I also believe taxation is theft, nobody’s going to change my mind on that,” Creech said. “It’s so easy to get in our taxpayers’ pockets. So what I think we need to do as a legislature is figure out why our tax commissioners are doing what their doing, why are they not following the law. We want the entire state to follow the law and again we don’t follow our own. I think there needs to be some accountability and that’s going to start with us.”

This isn’t a new problem

The hike comes on the heels of the mandated average hike of 20% from the 2020 property value reassessment that former auditor Roger Reynolds fought. That failed fight meant tax bills for 2020 and 2021 had to be recalculated for residential and agricultural properties Reynolds challenged in Fairfield, Hamilton and Fairfield and West Chester townships, and the adjustments were on the recent first half tax bills.

It meant 48,999 taxpayers in those areas — where the bulk of the county’s population resides — saw tax bill adjustments totaling $6.1 million.

The tax commissioner ordered Reynolds to increase values an average 20% in Fairfield, Hamilton and West Chester Twp. and 23% in Fairfield Twp. On average, the commissioner accepted Reynolds’ 14% increase in other areas.

Reynolds disputed the former tax commissioners’ reliance on the most recent year’s property sales instead of the three-year examination. The Board of Tax Appeals — the decision was handed down last September — sided with the tax commissioner.

“Placing greater weight on certain data versus other data is a standard and accepted appraisal practice ... many pivotal aspects of an appraisal are based upon the subjective judgment of the appraiser. Information is utilized or ignored. Various adjustments and formulas are selected. Methods, calculations, facts and extrinsic data are examined and considered and then applied or disregarded,” the opinion reads.

“In short, the search for true value is not furthered, but rather is hindered, by compelling the Tax Commissioner to treat data from all three years the same, and RC 5715.012 does not require or compel such equal treatment. It is very well established that sales closer to the tax lien date are more probative than remote sales.”

Leaders looking for solutions to help taxpayers

County officials maintain pandemic-induced supply and demand issues have artificially inflated home sales, and if the huge increase stands, people will be saddled with higher than warranted property values for three years until the next reevaluation.

“No one plans for these increases but we had a pandemic we didn’t plan for either and apparently this looks like another unfortunate consequence,” Commissioner T.C. Rogers said adding “we are here to see if there’s anything this commission can do better to protect the lifestyles of our Butler County residents.”

County Prosecutor Mike Gmoser told the summit attendees the legislators could implement a simple fix that would take away Harris’ discretion. He said there are parts of the law that say the tax commissioner “shall” do certain things regarding data collection — which removes any discretion — and other parts say the commissioner “may” do certain things, like decide how to apply the data, “the Ten Commandments doesn’t say thou may not kill, thou shall not kill.”

“My suggestion is to our representatives and our senators that you take that word may and change it to shall,” Gmoser said adding they also must require the tax commissioner to “give equal weight to each one of those years for which the data is collected, because otherwise you’re going to have the opportunity on how to get around the mandatory and still have the discretion exercised at the will of that tax commissioner.”

The legislators had their own ideas for how to help, Rep. Jennifer Gross reiterated what she told the Journal-News previously, that the state could consider giving taxpayers a refund, if the market tanks as everyone believes it might.

Rep. Thomas Hall said many legislators statewide are concerned about these increases and “this is something we’re going to have to have all-hands-on-deck to approach.”

He said there is a bill being drafted that would cap the increases and possibly giving more discretion to the county auditors.

Nix listed a number of other possible solutions including using some of the state’s “big general fund surplus” to issue credits to taxpayers who will be hurt by the value hike, adjust the Homestead exemption and the big one is reforming school funding — the Ohio Supreme Court ruled it unconstitutional in 1997 — among other initiatives.

Nix and Dixon both said this issue isn’t just a state problem, local jurisdictions can be more circumspect in their use of tax incentives like tax increment financing (TIF) and residential improvement districts (RID). Under this economic development tool taxes are diverted to pay for infrastructure for new developments.

“We have people granting TIFs and RIDs that are usually for the wrong purpose,” Dixon said. “And what happens is it ends up that the taxpayers are subsidizing the development and everybody else loses until that comes off.”

He suggested the local governments need to “get that straightened up” but said the state lawmakers “can put some teeth into it.”

Carruthers told the group she met with Harris recently and said: “I’m shocked she isn’t here quite frankly, she seemed to want to work with us, so maybe not. I thought she was quite nice and didn’t seem to be hard-nosed about it.”

Dixon had suggested the group meet quarterly to hammer out some solutions but Lang said they need to act quicker than that.

“I think we should try to get together again in about a month,” Lang said. “Let us do our individual work at the statehouse, all of these ideas are great ideas thank you Nancy, those are two-year maybe four-year things to get initiated. We need to do something quick or our residents are going to get their a** kicked with an astronomical increase.”

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