How Hikes in Real Estate Values Are Boosting County Tax Rates

MJP —

Property tax income has started to take a hit as a result of rising property values in recent years; county authorities have stated their intention to keep this increase as low as feasible for the sake of taxpayers.

County reassessments of real estate are required by Ohio law to take place every six years, with revisions made in the third year of that interval.

Due to the staggered nature of the cycle, tax income has been impacted by growing property values in some counties while other counties are only now reaching reassessment or value upgrades.

Among those counties, Allen County is currently in its third year. Rachael Gilroy, the county auditor, stated that the latest tentative value updates indicate that the total property valuation in the county, including abated and exempt property values, is slightly less than $3.48 billion.

Agricultural values at 2023 levels are included, however new construction appraisals are not yet included. Compared to valuations in 2023, which came to slightly under $2.95 billion, this indicates a rise of about 18%. The tax amount is estimated to be little more than $2.96 billion out of the over $3.5 billion in valuation.

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Gilroy explained that after the update is finished, they send a preliminary abstract to the state outlining their findings and calculations. From there, they engage in back-and-forth negotiations with the state regarding their estimation of our values relative to our current estimates.

Approximately 92% of the property’s fair market value is what we’re aiming for. On occasion, our estimations of that figure differ from the state’s. Despite their clear preference for a higher price, county officials are pushing for a decrease in property values for our citizens.

While county officials strive to keep property value increases modestly to keep tax bills low for residents, Gilroy believes that the average increase in property values will be approximately 26% in the county. However, she stressed that this may not necessarily come to pass. The revised assessments will be finalized next year, and the taxes will be levied in 2026.

A complete reappraisal of Putnam County’s property values was carried out last year, hence the county is in a new position. Robert Benroth, the county auditor, reported that, on average, home values increased by a little over 30% during that reappraisal.

The property taxes are collected by the county using an inside millage system, and the current total is 2.6 mills. At least half of such amount must go to the county Veterans Service Commission by state law. This year, county officials opted not to collect the additional 2.1 mills, so next year, property owners will only have to pay the 0.5 mill rate for property taxes.

“They will not collect somewhere around $2.7 million or $2.8 million,” Benroth added. Our general fund balance is significantly larger than usual, which is why they aren’t collecting it. Part of it is the result of prudent financial management that avoids frivolous spending, and part of it is the result of a rise in revenue due to the asset’s increased worth.

Benroth stated that this decision will only have an impact on taxes in 2024 and that it will be reviewed again next year.

“Right now, we have a good balance and have been blessed,” he stated.

Hope Robey, supervisor of the real estate department at the county auditor’s office, stated that residential property values in Auglaize County were up 30 percent on average from the previous levels, with some places seeing even larger increases. This information is based on the results of the 2023 property value reevaluation.

It has gone as high as 110,000 percent on farmland, she added. A lot of factors are considered throughout the reevaluation process. Everything from the market to the construction costs is a factor. People are shelling over $230,000 for a piece of real estate that was originally worth $130,000. Our sales ratio studies are affected by it, and it also drives up the market.

Last year, the county’s general fund saw an increase of around $780,000, according to Robey, thanks to the rise in property prices and the resulting increase in property tax revenue.