Hedge fund cuts back on request
"If approved, the appeals would cut the company’s property taxes and would require the return of as much as $524,668 in 2012 tax revenues already paid to Huber Heights Schools, the city, Sinclair Community College, human services agencies and Dayton Metro Library. After that onetime loss, the law requires that the auditor adjust tax rates countywide and spread the burden of Magnetar’s tax cut to all taxpayers, Keith said."
It is still difficult to figure out the entire formula but it appears that the collection of $xxx dollars a year for approved levies either can be violated in specific years or will be made up for in subsequent years. It would be interesting to know which actually occurs.
Tom's Original article -----------------------------------------------
Certain homeowners should have more concern about the Huber Home Rental reassessment than the school system. If Ohio Revised Code 319.301 Determining and certifying tax reduction percentage for carryover property works the way this chart indicates, the school system will lose some income but those people whose property values don't go down enough will pay the majority of the difference.
Chart shows millage rate for inside and outside property taxes going to the school. Green font indicates millage rate was down as compared to the year before. Red font indicates it was up. You should know why by the end of this article.
Recently the new owners of Huber Home Rentals made the top article in the Bloomberg News.
Magnetar Goes Long Ohio Town While Shorting Its Tax Base (Read the article to the left so the points I make below make better sense)
The main theme is the new company is asking the county to reassess the properties expecting the new assessment to be about half as much. Quoting the article "Granting the appeal would reduce property tax collections by $1.39 million, including as much as about $800,000 to Huber Heights City Schools, equivalent to about 16 teaching positions, and curb financing for community colleges, police, fire, libraries and services to the disabled, according to (Karl L.) Keith. (Montgomery County Auditor)"
As a follow-on WYSO produced this radio segment
A Hedge Fund Buying Up Huber Heights? WYSO’s Lewis Wallace Talks to Bloomberg Reporters
The interesting part of the radio segment comes at 59 seconds into the interview
Interviewer (Lewis Wallace), "How do these property assessments effect levy funding?"
John Gittelsohn (article author) ," Right now people in a certain area are obligated to pay a dollar amount every year, so if the assessments go down in the future their tax rates will go up to be able to repay these obligations"
The quote attributed to Mr. Keith and the snippet from the author of the article conflict. Using the tax levy distribution worksheet my son and I created in order to evaluate the TIF effect on the school's income we see that if the millage rate stayed the same then an assessment value that dropped from $98 million to $50 million would cause the amount of money paid by this property owner to the schools to drop about $863,000. However, the amount the school would lose is about $115,000. The rest would be paid to the schools by the other property owners in the city whose assessments didn't go down as much.
The reason the schools would lose the $115,000 is because inside millage (the schools get 6.8 mils) is not adjusted because of property values. On the other hand outside millage (the schools get 38.27 mils) gets adjusted up or down so that the dollar amount collected by the schools for these levies is the same every year. In other words if a levy in 1999 was passed in order to allow the schools to collect $3.9 million dollars the millage has been adjusted every year so that the amount collect is $3.9 million in 2000, 2001, 2002 etc etc. If you pay more or less toward that 3.9 million depends on the change in value of your house compared to the change in value of the other houses in the rest of the city. Hopefully I've written clearly enough so you understand the millage rate changes in the chart above. Let me know if I need to try again.
It's getting late so here are some key points:
Over the last couple of years the people that live in Montgomery County north of I-70 have had the least amount of depreciation compared to the rest of the Montgomery County portion of Huber Heights.
The Miami County portion of Huber Heights would not be affected by a reassessment of the Huber Rental properties.
The Dayton City residents that go to Huber Heights City Schools would be affected.
I'll edit later. As with all my articles, this one is meant to spur discussion. The purpose of my writing is not only for me to share information that I know but also for me to learn what you know. Because when it comes down to it, I have the same amount of time to figure out what is (really) going on as any other father of five with a full time job, home chores, and a need for fresh air. Thanks for making my learning experience more efficient.