New rates on land to impact schools

Published: Sun, September 18, 2011 @ 12:09 a.m.

By Peter H. Milliken


The evaporation of $547 million in Mahoning County real-estate value will result in varying and sometimes uncertain amounts of revenue losses for the county’s public school districts, school treasurers say.

The deflation in the real- estate market, which has accompanied the recent recession, is unprecedented in the tenures of several of the county’s longtime school treasurers.

“Never have I witnessed this before,” said Richard Santilli, Boardman schools treasurer for the past 21 years. “I’ve witnessed slight increases, but never a decrease before.”

Santilli expects his district to lose some $246,000 in revenue from unvoted millage, known as “inside millage.” Santilli said he believes revenue from most of the Boardman schools’ voted millage will remain intact.

Some 68 percent of real-estate tax revenues go to public schools, said Daniel R. Yemma, county treasurer.

In Ohio, school districts with higher total real-estate valuations are funded primarily by property taxes, and those with lower valuations are funded primarily by the state.

In the once-every-six-years comprehensive real-estate reappraisal, whose tentative results were announced last week, the Boardman school district lost 5.4 percent of its total real-estate value and 10.1 percent of its residential value.

In the fiscal year that ended June 30, Boardman schools got $25.1 million in real-estate tax income, of which $4.5 million was unvoted. The district’s total revenue was $39.8 million.

The school board decided in May not to replace two administrators and 27 teachers, who took early-retirement incentives, for an anticipated savings of $6.8 million over three years.

“The cuts have been pretty extensive,” Santilli said, adding that decisions on additional cuts or revenue improvements to cope with reduced income from real-estate devaluation will be up to the school board.


Pattie Kesner, treasurer of the neighboring Canfield school district for the past 25 years, predicted her district would lose about $83,000 in annual revenue from unvoted millage.

In the Canfield school district, total property valuation fell 3 percent, with residential losing 3.6 percent.

“We will just have to make further adjustments in spending to account for the $83,000 loss,” she said.

Kesner said, however, she did not expect her district to lose revenue from voted millage. “I think [House Bill] 920 will work to our benefit,” she said.

Kesner was referring to a bill passed in 1976, which adjusts the tax rate so taxpayers, as a group, pay the same amount after a reappraisal as they did before it.

Canfield schools receive $18.8 million annually from real-estate taxes, of which $16 million is voted and $2.8 million is not voted. Total revenues are $23.9 million.

Canfield schools recently approved employee-union contracts designed to save $1.9 million over three years, ended busing of high-school students and instituted pay-to-play for sports and club activities.

The district has a 4.9-mill, five-year new property tax levy on the Nov. 8 ballot, which, if passed, would generate $2.8 million a year.


In the Poland School District, Donald Stanovcak, treasurer for the past 17 years, projected a $54,000 annual loss in revenue from unvoted millage and said he wasn’t sure if the district would lose any revenue from its voted millage.

The district lost 3.1 percent of its total valuation and 4.4 percent of its residential value.

Poland schools expect to receive just more than $11 million in real-estate taxes this fiscal year, which began July 1, with voted millage accounting for 87 percent and the remaining 13 percent coming from unvoted millage, Stanovcak said. Total revenues are projected to be $18.4 million.

The Poland schools eliminated busing of high school students this fall for an annual saving of $283,195, but Stanovcak said any additional spending cuts or revenue increases will be up to the school board.


In Struthers, Michael Evanson, schools treasurer for the past 15 years, said his district can easily absorb the loss of the $35,767 in annual revenue from unvoted millage that he is projecting.

Evanson said he believes House Bill 920 will prevent any losses in voted millage in his district.

Real-estate taxes are expected to raise $4.2 million for Struthers schools this fiscal year, with 87 percent from voted millage and 13 percent unvoted. This year’s revenue from all sources is projected to be slightly more than $17 million, he said.

In the reappraisal, Struthers lost 5.3 percent of its total real-estate value and 7.4 percent of its residential value.


Based on its 8.2 percent drop in overall real-estate valuation — which includes a 19.3 percent drop in the residential sector – the Youngstown school district would lose $190,971 from its $2.3 million in scheduled revenue from unvoted millage this year.

Bill Johnson, schools treasurer, said it’s unknown whether and to what extent, state funding might compensate for that loss.

If the district makes cuts, its goal is to make them in a manner that “has the least impact on the children,” Johnson said. The district would prefer not to ask for another new levy, he said, adding that it expects to put a renewal levy on the 2012 primary election ballot.

Johnson predicted House Bill 920 will protect all the district’s revenue from voted millage, which is scheduled to be $24.8 million this year. He added that he expects revenue from the district’s 9.5-mill emergency operating levy, which took effect in January 2009 and raises $5.2 million annually, will be completely protected.

The voted and unvoted real-estate revenue combined account for $27.1 million out of revenues of about $142 million this year.

Johnson noted, however, that “it’s not uncommon” for the city schools’ cumulative delinquencies in real-estate taxes due to reach $7 million to $9 million.

“It’s very complicated how all this is going to work,” he said of school funding in the wake of devaluation. Tax abatements, primarily on commercial and industrial properties, will complicate matters further, he added.


In the Campbell schools, where overall real estate valuation fell 13 percent and residential fell 18.7 percent, Nora Montanez, schools treasurer, declined to provide figures on projected revenue losses because she said the valuations from the county auditor’s office are only tentative.

In an earlier interview, however, Tom Robey, Campbell schools superintendent, said the direct financial consequences of the value loss for his district, which gets more than 80 percent of its funding from the state, will not be significant.

Anthony Magnetta, budget analyst in the county auditor’s office, said revenues from unvoted millage will rise or fall in an amount equal to the percentage change in real-estate valuation in a school district.

Although House Bill 920 tends to make voted levies whole in a time of devaluation, a fixed-rate levy can never rise above its original voted millage, he said.

Therefore, Magnetta said, it’s possible a levy won’t be able to charge what it did in the previous year.

“Generally newer levies that are at or near their voted millage are the levies that are at risk of not collecting the revenue they are expecting,” he said.

Santilli said the only Boardman levy that may not deliver its full voted revenue is a 5.9-mill general operating levy first passed in 2003, which was reduced to an effective rate of 5.46 mills by provisions of House Bill 920 due to property value growth in its early years. That levy generates $4.7 million annually.

Because of the complexity of the tax-rate process, it’s too early to speculate what tax rates will be next year and which levies will be adversely affected by real-estate deflation or the accompanying revenue loss, Magnetta said.

Any changes in real-estate taxes based on the reappraisal will be reflected beginning with February 2012 tax bills.

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