State tax commissioner recommends huge property value hikes

Apr. 18—The Butler County auditor is still waiting to hear how much the state tax commissioner will order her to increase property values, but the 12 other counties subject to triennial updates have been ordered to hike values as much as 43%.

All of the other counties received recommended value increases last week except Butler County. The highest recommended hike is 43% in Clermont County just east of here and Montgomery County to the north was informed their values for residential properties should go up 37% — and commercial by 13%.

The letter to Montgomery County Auditor Karl Keith reads:

"You should already have received semiannual ratio reports for 2020, 2021, and 2022. Based on the data in those reports and other available economic information, we recommend the following changes be made in real property values in Montgomery County for tax year 2023," the letter reads. "Bear in mind that these are recommendations for adjustments in aggregate values. Caution should be taken to ensure that values are properly equalized among the various taxing districts in the county."

Of the dozen recommended increases eight were in the 30% range, two each in the 20% and 40% ranges.

Butler County officials have been outraged over an early estimate of a 24% value increase, but Keith told the Journal-News "it was what was expected given what we've seen in the real estate market in the last couple years, how incredibly hot it has been and robust and given the growth we have seen in our county."

He said they were expecting anywhere from 25% to 40% depending on specific locations in the county.

The Clermont County Auditor's Office issued a release stating they will be challenging the 43% increase.

"This program is required by law to equalize values. It is not designed to increase or decrease taxes, but to keep property values up to date with current prices paid for properties in accordance with the laws of the State of Ohio," the release stated. "The last three years we have seen a tremendous fluctuation of the housing market with record sales and homes selling quickly and with multiple offers above list price. While this trend is not unique to Clermont County, the State's recommendation of 43% we believe is not in line with valid sales in our area."

Property in all counties is reappraised every six years, and property values are updated every third year. Butler County Auditor Nancy Nix told the Journal-News last month she was expecting an average 24% hike. In light of the increases elsewhere she told the Journal-News the final figure could be higher.

"It very well could be, I would not be at all surprised," Nix said adding the numbers are "scary" but real relief doesn't lie with the state tax commissioner because "the math is the math."

"Instead of the values, I think we're all focusing on the wrong side of the equation, it's a legislative issue," Nix said. "It's the state reps and the state senators working together to take the burden off property owners, to lessen the tax burden. That really is the only fix when you're in this inflationary environment."

Their increase estimate was based on early information the state made available to them; there is more market data involved in arriving at increases. Real Estate Director Mike Stein told the Journal-News previously for the triennial reassessment, "we basically review by neighborhoods in the county, we use the sales data as we do for the annual review and the state will come back and calculate ratios and averages, and the first half of 2022 the ratios came back at a 24% increase."

During the state-mandated 2020 reappraisal all 165,000 Butler County parcels were reassessed and the state ordered average 20% increases for Fairfield, Hamilton and Fairfield and West Chester townships. Former Auditor Roger Reynolds fought and lost his appeal of those increases.

Reynolds held value increases to around 14% after the 2020 reappraisal during his fight with the state so Nix's office has had to recalculate values in those areas for the last three years. As a result 48,999 taxpayers in those areas — where the bulk of the county's population resides — saw tax bill adjustments totaling $6.1 million.

Gary Gudmundson, communications director for the Ohio Department of Taxation, said the Butler County numbers are delayed because of the previous dispute.

"The Department of Taxation (ODT) is still working with Butler County to ensure that the triennial update recommendation includes accurate, updated values which incorporate the value increases ordered by the Board of Tax Appeals' (BTA) last September," he wrote in reply to the Journal-News inquiry. "ODT received revised sales data from Butler Co. on April 7, 2023, which is being reviewed with an objective of producing a recommendation that complies with state law and that will ensure Butler County's recommendation takes into account the value increases ordered by the BTA."

The county commissioners have sent an invitation to new state Tax Commissioner Patricia Harris to discuss the anticipated value jump. The letter indicates they want to discuss the impact the coronavirus pandemic has had on the real estate market, "a topic of discussion may be do the current economic circumstances warrant a unique interpretation of post-COVID recovery and a reframing of economic principles on property valuations."

It later goes on to say, "the world, nation, and most applicably, the state of Ohio is recovering from a pandemic that economically devastated Butler County residents and businesses. Let's not bring greater harm to these families and businesses as all recover in a new economic normal post-COVID."

Dixon told the Journal-News when the pandemic first hit and droves of people were quarantined, the rules of supply and demand kicked in, "they were bringing 10%, 15%, 20% above appraisal prices just because there was no supply, so that was the after COVID effect that we're now in," but those values aren't realistic now.

Stein said he is not certain whether the tax commissioner can take these things into account.

"This is such a unique situation I don't know if they have that discretion or not," Stein said.