2024MCS-Financial - Flipbook - Page 11
6 YEAR PROPERTY REVALUATION
SUMMER 2024
EVEN WITH THE RISE IN PROPERTY VALUES, MENTOR PUBLIC SCHOOLS TAX REVENUE WILL STAY
RELATIVELY FLAT
Mentor Public Schools is funded primarily
through local property taxes and we are fortunate
to have a strong business community along with
our residents contributing to our schools. Still, our
revenue stays relatively flat while costs continue to
rise. This contributes to deficit spending and the
need for the district to pursue additional revenue
sources, like new levies. However, it’s important to
note, asking taxpayers for new money comes as a
last resort as we work diligently to control costs and
seek alternative revenue. For example, we’ve
implemented a variety of cost-saving initiatives in
recent
years,
including
reducing
staff
proportionally
with
student
enrollment,
redistricting, closing and consolidating school
buildings, cutting budgets, creating shared and
support service agreements for revenue, securing
grant funding sources, working with our employee
bargaining units to control health care costs, and
more.
In this section of the financial report, I want to
focus on how property taxes contribute to our
revenue because the Lake County Auditor’s office
is conducting its Sexenial Revaluation process, as
required by Ohio law this year. So, if you are a
property owner in Lake County, you received
notice of a new valuation of that property in July.
We’ve been in contact with Auditor Christopher
Galloway, who expects owners will see a
double-digit percentage increase in valuation, on
average, across the county. This new value of your
home, does not mean you will see a proportionate
rise in your tax bill, due to tax laws in place
designed to protect property owners. It’s not a
dollar for dollar conversion. And this means, our
school district will not see a proportionate increase
in tax collection, either – so our revenue will
essentially stay relatively flat.
There’s a reduction factor mandated by law to
protect taxpayers from inflationary growth, which
is commonly known as House Bill 920. In Mentor
Schools, most of our funding sources are fixed rate
levies that see limited growth from the amount that
was originally passed and effective rates are
adjusted so collections are shared across the
community as property values fluctuate, because
our district is not at the 20 mill floor. Mentor Schools
also currently receives 4.8 mills of inside millage. As
shown in the chart, fixed rate levies and inside
millage are included in the 20 mill floor. Not
included in the 20 mill floor are fixed sum levies.
Examples of our district’s fixed sum levies are our
Permanent Improvement (PI) levy that first passed
in 1988 and generates about $1 million a year.
Today, that PI levy generates the same amount of
money as it did back then. The same is true for the
renewal emergency operating levy the community
passed in November, which secured the
continuation of about $15 million a year in funding
for Mentor Schools for the next ten years. When
your property value goes up, you do not pay more
on those types of levies. those types of levies.
Where the district will see an increase in tax
revenue due to property revaluation is on the inside
millage. In August, we received updated
information about what to expect, so as of this
writing, we are projecting this could bring in a 1.9%
increase in revenue for the district– nowhere near
the average valuation increase we’re expecting. To
Levy Types and Changing Tax Rates
Fixed Rates vs. Fixed Sum Levies, and the Millage Floor
Note: Until a district reaches the state minimum millage, referred to as the “floor” a
district’s outside fixed rate levies will be adjusted downward to offset inflationary
valuation growth.
make this projection for the district, I based my calculation assuming a 25% average increase in
property values, which for Mentor Schools taxpayers could equate to about $42 per $100,000 valuation per year going to the schools. But again, that is
an estimate based on projections and you have to
keep in mind each property is assessed individu-
Again, Mentor Schools is not at the “floor”, so our
outside fixed rate levies will be
adjusted
downward to offset inflationary valuation
growth– keeping our tax collections relatively flat,
as I described above. It’s also worth noting that
Mentor Schools has only passed new money one
time (in 2016) since 2004.
your friend across town might see a 20% increase. It
is also possible some properties wouldn’t see an
increase at all, or in rare instances, even a decrease.
My projections are based on an educated estimate
of what we’re expecting is possible across the district’s boundaries, averaged. The new valuation
you will receive as a property owner in July will be
the appraised value of your property, but you only
pay taxes on your assessed value (which is 35%
of appraised value). Your first tax bill based on
your new property valuation will come in January
2025.
If you think about how other local entities are
funded through different types of taxes, like
income or sales tax, when those taxes experience
growth, the entities they fund see that same
growth, too. Funding for Mentor Schools is unique
in that there is not a lot of space for growth without
asking the community for new monies. Our Board
of Education, Superintendent and I are committed
to transparent, honest and accurate fiscal management of the community’s money being used to
provide educational opportunities for the children
we serve each day. I would encourage you to take
a look at our website to learn more about the
finances of Mentor Schools. Thank you for your
continued support and please feel free to reach out
to me with any questions.
You may hear that other Lake County school districts could see a bigger increase in tax revenue than
what I’m describing for Mentor and that would be
if the district reaches the state minimum millage
floor, known as the 20 mill floor, which is based on
each district’s inside and outside fixed rate millage.
MENTORSCHOOLS.NET/CFO
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