Historic property value and tax increases will hit some Summit County communities harder

The historic property value increases of 2020 could pale in comparison to what’s coming for some Summit County communities and homeowners this year, especially since lawmakers declined to soften the blow from higher property tax bills expected in January.

Every three years, state law requires Ohio’s 88 counties to reset the value of all properties. The new values determine the portion that individual property owners and entire communities pay to fund school districts, libraries, drug addiction and mental health programs, zoos, metro parks, local governments and more.

In Summit County, the 2020 reappraisal involved a comprehensive sexennial (or six-year) update based not only on property sales data but a physical check of every property. This year’s triennial (or three-year) update relies solely on the sales data.

But the state, following protocol implemented in 2020, is again requiring counties to use only the last year of sales data instead of all property sales over the past three years. The Ohio Department of Taxation on Thursday approved the new property values set by the fiscal office, which determined that the narrower use of only one year of property sales nearly doubled the increases in some communities.

New values and corresponding taxes due next year will be posted at the Summit County Fiscal Office's searchable online database of property records at https://tinyurl.com/yc2an9d7. When that happens, officials are anticipating that a surge of homeowners, even more than the unprecedented number that complained after the 2020 reappraisal, will challenge their new property tax bills due starting Jan. 1.

Who will be most impacted?: Which Summit County communities will get hit hardest with property value, tax increases?

Property value hikes double with one-year sales data

The discrepancy between using one or three years of sales data teed up something of a negotiation process between Summit County and the Ohio Department of Taxation.

In 2020 when some county auditors took the state to court (and lost) over the one-year look-back limit, Summit County Fiscal Officer Kristen Scalise proposed an 8.8% increase for residential property as the housing market took off in the early weeks of the pandemic. The state countered with 14%.

Scalise moved to 9.78%. And the state countered at 12%, which is where the average increase finally settled.

In mid-April this year, Tax Equalization Division Executive Director Shelley Wilson notified Scalise in writing that the total value of all residential property in the county should be increased by 34%, compared to the 12% increase in 2020 and 8% in 2017.

A 34% average property value increase wouldn’t mean that property taxes would also go up 34%, but non-voter-approved portions of levies would increase with any increase in property value, meaning that some homeowners could see considerable tax hikes.

Scalise countered the state’s proposed 34% increase with a 31.4% increase, which the state accepted. Scalise said her team checked a few communities within Summit County and found that property value increases would have been 10 to 15 percentage points lower had the state let her use all 20,000 sales since the last reappraisal in 2020 instead of just the 6,400 sales in 2022.

The staggering jump in values in 2020 resulted in a more than doubling of property value appeals filed with the Summit County Board of Revision. The vast majority of property owners who complained had their property tax bills lowered.

Homeowners can apply to contest their property values from Jan. 1 to March 31. Scalise is encouraging anyone shocked by their higher tax bill to file for a reduction.

New calculation limited to hottest sales data in some communities

In the last year, county tax officials who pore over sales data say inflation and higher interest rates are discouraging new construction or keeping homeowners with low-rate mortgages from selling their homes, especially in suburban communities where housing markets have started to cool off.

Now, investors in search of homes to buy and sell are shifting their focus to more modestly priced markets with existing housing stock like Akron, which will see some of the highest valuation hikes at about 40% compared to the average of 31.4% countywide using the county’s figures.

"It’s not just happening in Summit County. It’s statewide,” Scalise said.

In some counties, including Butler where the auditor sued the state three years ago over forcing higher property value increases, the state says residential property values must go up more than 40% and the value of farmland must double.

The state gave no recommendation on agricultural property in Summit County due to insufficient sales data and recommended a 14% increase in commercial property value.

Summit County’s modeling also shows the highest percent increases hitting homes valued at less than $200,000, local officials said. That was the case three years ago when a Beacon Journal analysis of the 2020 reappraisal in Summit County showed property values climbing twice as fast for homes valued under $200,000 compared to homes valued over $250,000.

‘You’ve got people in a bidding war’

Summit County’s higher property values increases will be reflected on new tax bill mailed out in January. That bill will cover taxes for the second half of 2023.

Scalise was hopeful that the legislature would have allowed her to use sales data from 2020 and 2021 when the housing market was hot but not as tight as it is today.

“The supply is so short,” said Dominic Basile, director of Real Estate and Appraisal at the Summit County Fiscal Office. With the Fed saying more interest rate hikes would be "appropriate" later this year, homeowners aren't selling and builders are falling further behind demand.

“Now, you’ve got people in a bidding war,” Basile said.

Along with the 40% increase in Akron, the total value of residential property is jumping 39% in Barberton. Mogadore, with its modestly priced homes, will see a 40% average increase while Coventry and Clinton would see the highest increases in the county at 44% and 43%, respectively.

What do rising property values mean for property taxes?

The net effect that higher individual and community-level property values will have on tax bills is complicated.

Until individual property records are updated in the near future, the broader picture is that property taxes will go up, but not as fast as the percent increases tied to the new values.

In one analysis provided to the Beacon Journal by former Akron Public Schools Treasurer Ryan Pendleton, an increase in property values at the scale in which the county is proposing would result a more than 5% increase in property tax bills for the average homeowner in Mogadore.

When property values go up, state law allows local governments and schools to collect more money on only a portion of levies — the portion not approved by voters, including 10 “inside mills” for local governments and a “20-mill floor” for school districts. House Bill 920, which was passed in 1976, freezes the amount that the rest of the levies can collect. If property values go up, HB 920 forces the effective millage rate to go down so not a penny more is collected than when voters approved their levies.

Beyond the inside millage, there’s a second reason why some property taxpayers could end up owing more next year — and why some might even pay less.

Every community pays a portion of countywide levies. Communities with average property value increases greater than the 31.4% average increase will end up paying greater portions.

The result is that higher valuations in Akron, Barberton, Mogadore, Coventry and Clinton will result in these communities contributing more to these countywide levies while communities with cooler housing markets in 2022 would pay less, including Peninsula (where property values are projected to go up only 7.7%), Boston Heights (18%) or Richfield Township (24%).

But even within communities, some neighbors or neighborhoods could end up paying more or less than others. If the value of one property increases above (or below) the average increase in its surrounding city, town or village, for example, then that property owner would pay a greater (or smaller) portion of local levies that fund the operation of local schools and government.

Legislative relief stripped from the state budget

House Republicans introduced House Bill 187 this year to require all three years of sales data in reappraisal calculations.

Rep. Bill Roemer, R-Richfield, anticipating that the measure might not pass as a state budget amendment offered by Sen. Kristina Roegner, R-Hudson, has kept the legislation moving along with hearings as chairman of the powerful Ways and Means Committee. After leaders in the House and Senate came out of a conference committee with a final version of the state budget that excludes HB 187, Roemer said it appears too late in the game to pass anything that will “smooth the curve” of climbing property values in Summit County, at least for this year.

“Personally, I’m very frustrated that we didn’t get it done,” Roemer said while driving back from Columbus to his home in Richfield.

Testifying in favor of HB 187 are county officials from across Ohio, including Summit County Councilwoman Bethany McKenney who told state legislators that she is “deeply concerned for the citizens of my district who may be struggling to stay in their homes and for seniors on fixed incomes.”

But while many auditors and fiscal officers, especially in counties facing steep increases, are supportive of HB 187, the Ohio County Auditors Association opposes the move. The organization’s chair, Warren County Auditor Matt Nolan, called switching to three-year sales data “a knee-jerk reaction to the current real estate market.”

Roegner also expressed disappointment in the conference committee rejecting relief from pending tax bills, but she and Roemer are hopeful that lawmakers can work with county auditors across the state to pursue a workable solution moving forward.

Reach reporter Doug Livingston at dlivingston@thebeaconjornal.com or 330-996-3792.

Confused? Summit County Fiscal Office is taking appointments

With the anticipation that more residents will contest higher tax bills arriving in January, Summit County tax officials are ramping up efforts to educate homeowners who can ask questions or file informal complaints over the phone, virtually or in person at nine meetings scheduled in August and September.

To schedule an appointment with a fiscal office appraiser, visit fiscaloffice.summitoh.net or call 330-643-2710 or email appraisedvalue@summitoh.net. Appointments are available from 1 to 8 p.m. for the following locations and dates:

• Barberton Active Adult Center (500 W. Hopocan Ave.) on Aug. 15.

• Stow City Hall (3760 Darrow Road) on Aug. 16.

• Tallmadge Community Center Hall (80 Community Road) on Aug. 22.

• Fairlawn Kiwanis Community Center (3486 S. Smith Road) on Aug. 23.

• Twinsburg Community Center (10260 Ravenna Road) on Aug. 29.

• Firestone Park Community Center (1480 Girard St.) on Aug. 30.

• Cuyahoga Falls Lions Park Lodge (641 Silver Lake Ave.) on Sept. 5.

• Green Central Park Community Hall (1755 Town Park Blvd.) on Sept. 19.

• Richfield Village Hall (4410 W. Streetsboro Road) on Sept. 20.

The window to file an official appeal with the Board of Revision is Jan. 1 through March 31.

This article originally appeared on Akron Beacon Journal: Summit County property values and tax bills increasing