A closer look at local school taxes

• By YS News Staff
• Published: March 1, 2018

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By Megan Bachman and Carol Simmons

Currently near the top third of school districts in a tri-county area for its combined school income and property tax, Yellow Springs Schools would rise even higher in comparison if a 4.7-mill/0.25 percent income tax levy is passed May 8.

The proposed levy, which aims to raise nearly $18.5 million to renovate and replace the existing middle and high school, would cost a typical Yellow Springs household $403 more per year on top of the $2,369 such a household currently pays in property and income taxes to the school, using the median Yellow Springs income of $62,500 and a home appraised at $150,000.

Those in support of the levy believe the increased cost is worth it. Not only will the new levy address the long-term structural needs of that facility in the most cost-efficient way, but also the improvements could attract more families with young children to the district, they say. They view the current plan as a compromise after the idea of building a $30-plus million single K–12 district campus was floated last year, only to meet community resistance.

Meanwhile, voters opposed to the new levy are concerned that the additional cost would keep those same families away, while straining the budgets of those already living here. They also said a lack of clarity over the future plans for the renovation or replacement of Mills Lawn Elementary School made them hesitant.

For TJ Turner, the levy request is necessary and reasonable.

Co-chair of the Committee for the Levy, Turner said in a recent phone interview that the district’s “substantial facilities challenges” require action. He believes the district, through a year-long process of exploration and community engagement, has come up with a plan that satisfies “what we could sustain and what would be best for the students and the community itself.”

He said that residents may balk at the amount of money being sought, but given the long-term structural needs at the middle/high school campus, and the district’s efforts to come up with a plan that takes community feedback into account, the project is well-conceived.

Local resident Matthew Kirk is worried that the cost of the new levy may make living in the village less affordable for some and further reduce the socioeconomic diversity that villagers have long valued. He said the schools should consider funding incremental facilities improvements rather than borrowing a large sum, especially in light of utility rate increases and other high costs of living that are causing even middle income villagers to feel “economically vulnerable.” The timing is not right for such a large ask, Kirk said.

“It’s not so much the school [district’s] fault, it’s that the schools are playing the straw that broke the camel’s back,” he said.

As the levy campaign kicks off and ahead of a Thursday, March 1, facilities presentation from the district, this article examines comparative and real figures of local school funding, estimates how much a typical district household will pay if the levy passes, breaks down how much and for what residents of the district currently pay and considers various community perspectives.

Village schools in comparison

In discussions of the facility improvements in the district, which began last year, the fact that villagers pay a higher property and income tax rate to fund their schools than many neighboring communities has been raised as a concern. Where does Yellow Springs fit in?

Looking at property tax rates alone, the Yellow Springs Schools District is in the lower half of 30 area districts located in Greene, Clark and Montgomery counties, with 37.98 effective mills, according to district figures for taxes collected in 2017. At 17th, the average annual cost to a homeowner per $100,000 of appraised value is $1,163, well below the schools at the top: Oakwood ($2,283), Northridge ($1,796) and Kettering ($1,783).

The local school district climbs to 11th, however, when adding the millage equivalent of a 1 percent income tax — 11 mills — and becomes the highest in Greene County for total effective mills collected.

Yellow Springs would rise to an estimated 56.43 equivalent mills of combined property and income tax if the new 4.7-mill/0.25 percent income tax levy is passed by voters, assuming other districts do not pass new levies. That would place Yellow Springs in fifth place regionally, behind Oakwood (74.56 mills), Northridge (58.65 mills), Kettering (58.21 mills) and Dayton (56.94 mills), which are all located in Montgomery County. 

Other selected districts behind Yellow Springs are Xenia (43.42 equivalent mills), Fairborn (42.5 equivalent mills), Cedar Cliff (39.23 equivalent mills) and Greenon (36.19 mills), assuming no changes in their tax rates.

If the local levy passes, Yellow Springs would also be one of four other districts in the tri-county area to collect a 1.25 percent income tax, the highest amount collected, and one of 10 that collects any income tax.

Community perspectives

The fact that current tax levels are among some of the highest in the area is a challenge for district parent Chad Runyon. He worried in a recent phone interview that additional taxes would affect local affordability, especially in light of the amounts already being paid to the schools.

“I’m really concerned about what’s going to happen here,” he said.

Runyon, a science teacher in Kettering, was a panelist this fall at a citizen-organized community forum that examined areas of concern regarding various plans then being considered by the district to address its aging structures.

“We pay more for our housing than anywhere else in the area except Oakwood,” he said earlier this month. 

While property taxes are assessed on appraised value, rather than market value, the price of local homeownership contributes to overall affordability.

“It’s tough. It’s a tough problem,” he said, adding that he sympathized with the district’s financial dilemma. “It’s not their fault that our property values are higher.”

Whether landlords will pass on some of their property tax increases to renters is another question to consider, Village Council member Judith Hempfling said in a recent phone interview in which she expressed reservations about “any new levy in the village.”

“I’m very concerned about affordability,” Hempfling said, citing some of the findings of the Village’s recent housing needs assessment. She said that according to the study, the village has 1,032 owner-occupied houses and 668 rental units. Of the renters, 42 percent make $25,000 or less, and 24 percent have a household income of $25,500–$50,000. Of the homeowners, 6 percent make less than $25,000 a year.

“The future of our village is at stake,” she said. “And this isn’t going to be the end of it. We still have another building that has not been addressed at all.”

Runyon echoed Hemplfing’s concern about focusing on the middle/high school project without knowing what might be coming concerning Mills Lawn. “I would like to know what their plan is for the other part of the district,” he said.

Levy co-chair Turner, who has two children at Mills Lawn and a third at McKinney Middle School, said that the immediate focus on the middle/high school reflects the fact that the need was “most dire” there. Like Hempfling, he also believes the future of the village is at stake, and improved school facilities are a way of ensuring a healthy, vibrant community.

Carol Madison Cox, who has two grandchildren at Mills Lawn, one of whom will go to McKinney Middle School next year, agrees that improved facilities are of paramount importance.

“They need to be going to a school that has a decent environment,” she said, noting that leaking roofs and mildewy walls are not conducive for learning. 

For Cox, it’s a matter of personal and community priorities. “Children need the best education we can give them,” she said.

Cox, who supported an early proposal to build all new structures, backs the district’s decision to split current project costs between a property tax levy and an income tax, so that the financial responsibility does not fall on one segment of the community alone.

A district perspective

The school district’s current plan is more affordable than other options, and more cost-efficient and environmentally sound in the long run, according to school board member Steve Conn. 

Conn said that after hearing from the community last year that the cost of a new single facility at a price tag of more than $30 million was “too big a nut to swallow,” the district decided to approach the rebuilding in phases, beginning with the school in most need of repair — the high school/middle school on East Enon Road. Any upgrade to Mills Lawn School won’t be likely for several years, he said.

The board then opted to forego some of the costlier amenities, such as a performance space, an improved gym and a community kitchen, to “make the project as financially responsible and doable as possible,” even though “it was a hard decision” to choose a more “stripped down version” of the project, Conn said. 

A more incremental way of addressing the serious issues at the high school/middle school, which include the need for electrical rewiring, new windows and floors and a solution to the middle school’s double-wide trailer, is “a lot less cost effective and less efficient than you might think,” Conn explained. The current plan is also designed to minimize disruption to students during construction. 

“[Incrementalism] didn’t make financial and it didn’t make logistical sense,” Conn said.“Renovation can cost more in the long run.”

Conn added that making significant changes all at once will increase the environmental sustainability of the facility more than incremental changes could. 

“I think investing in the schools for the next 30 to 50 years is a really important investment in the village’s future,” Conn said.

What we currently pay

Of the 37.98 mills currently collected in local school property taxes, 20 mills are in the form of a continuing operating levy, the parameters of which were established by the state in 1976. As a continuing levy, the levy does not expire. It raises nearly $2.7 million each year, almost a third of the district’s current $8.4 million in operating costs.

The other 17.98 mills are collected through a variety of voter-approved levies that have eventual end dates, though may be eligible for renewal.

The longest is a 27-year, $4.5 million 2-mill bond levy, approved in 2000, which brings in $256,000 a year. Bond levies allow districts to borrow a specified amount of money, to be paid back over a designated number of years, for construction purposes. The measure raised money for additions and renovations at both school campuses.

The district has three additional levies that are subject to possible renewal in the next seven years:

• A  five-year, 1.08-mill permanent improvement levy, last renewed in 2013 and due to expire in November this year, raises $138,000 annually. According to District Treasurer Dawn Bennett, the district will seek its renewal in the fall general election.

• A 10-year, 7.9-mill emergency operating, which was renewed in 2015, raises $1,060,000 each year for the district.

• And a second emergency operating levy, for 7 mills, was renewed for eight additional years last spring; it brings in another $915,000. Its expiration was planned to coincide with the other emergency levy in 2025, giving the district the opportunity to combine them in some manner in any renewal request.

Emergency levy revenues go toward operating expenses, while funds raised through permanent improvement levies go toward capital expenditures. 

All are taxes on assessed property values calculated through millage rates. 

How much will we pay?

When a tax levy is placed on the ballot, the Greene County Auditor’s Office estimates the cost a homeowner would be expected to pay for every $100,000 of appraised home value. For this levy, they estimated $164.50.

So, for a house in the district appraised at $150,000, the homeowner would pay $246.75 more each year for the 37 years of the levy (not accounting for a likely increase in appraised home value). For a property appraised at $175,000 that figure would be $287.88 per year and for a property appraised at $200,000 it would be $329 annually. A house appraised at $125,000 would pay $205.63 more per year. (The appraised value of a home is not the same as market value and is usually somewhat lower, according to Greene County Auditor David Graham.)

That estimate is only for the property tax portion of the levy. All residents of the school district with taxable income — whether they work inside or outside the district and regardless of whether they own property — would pay more income tax if the levy passed. The 0.25 percent income tax increase would cost a typical Yellow Springs household, with an annual median income of $62,500 according to the 2016 American Community Survey, about $156.25 more per year.

Taken together, a household in Yellow Springs that brings home $62,500 and whose house is appraised at $150,000 would pay an estimated $403 more per year, or $33.58 per month. The levy is set to expire in 37 years, and the income tax is to last for 30 years.

The school district includes the Village of Yellow Springs and portions of Miami Township, Xenia Township and a small area of Clark County. Nearly 80 percent of the district’s total property value, close to $140 million, is located within the Village.

Although some current tax levies qualify for Homestead and roll-back credits of up to 12.5 percent, recent legislation has repealed the credits, so that any additional or replacement levies passed after the legislation went into effect would no longer be eligible for the credits, according to Graham last week. The new levy, therefore, would not qualify for these credits.

Contact: mbachman@ysnews.com, csimmons@ysnews.com

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