MADISON TOWNSHIP — Supt. Rob Peterson said he thought the new Madison Local Schools levy would put the district on solid financial footing.
But after a misunderstanding about how much that levy would generate, funds remain tight for the district.
Voters in the Madison school district approved a new operating levy in November 2023.
Leading up to the November ballot issue, district officials and the levy committee told Richland Source it would generate $3.36 million in operating funds per year.
At the time, Peterson said he believed the number would actually be higher — closer to $3.6 million — based on recent property tax reappraisals.
Instead, the levy is generating just $2.94 million annually.
“That makes a huge difference in what you can and can’t do,” Peterson said this week.
Discrepancy due to confusion over impact of property tax increases
The November 2023 levy was Madison’s second attempt that year to secure new operating funds, after voters rejected an 8-mill levy in May.
After that, Peterson said Madison’s board and administrators consulted with Richland County Auditor Pat Dropsey.
Peterson told Richland Source that Dropsey told him “multiple times” if Madison’s levy passed in November, the collection rate of 7.5 mills would be applied to the reassessed property values.
District officials were confident property values would rise, so the board voted to drop the millage rate from 8 to 7.5.
“We would have never reduced the millage had we known the reduction factor was going to be applied,” Peterson said.
When asked about the discrepancy, Dropsey provided a copy of the Certificate of Estimated Property Tax Revenue, which he signed on July 20, 2023.
That document certified a 7.5 mill property tax in the district would generate $2.94 million.
When asked if he told Madison officials the levy would actually generate more, Dropsey said he doesn’t advise other public entities.
“I don’t advise anybody. I don’t work for Madison,” he said. “If they ask me for a calculation, I make it based on the current value, on the current millage and provide that answer as I’m required to do my the (Ohio) Department of Taxation.”
More on House Bill 920
There are two types of property taxes in Ohio — inside millage and outside millage.
The Ohio Constitution allows each taxing district to collect a maximum 10 mills of unvoted property taxes, also known as inside millage. This tax revenue is divided between school districts, townships, city or village and county governments — depending on where the taxpayer lives.
When property values rise, the amount collected on inside millage also rises because the millage (taxing rate) stays the same.
Meanwhile, outside millage (voted levies) are subject to an anti-inflationary factor under House Bill 920.
House Bill 920 essentially “freezes” the amount that can be collected on voted levies to the dollar amount collected in its first year. So when property values go up, the millage is reduced so the tax revenue remains the same.
“I did what I was required to do. I provided the information to the school and what they did with it was their business,” Dropsey added.
The confusion may have stemmed from a document posted on the auditor’s website in 2023, Dropsey said. Its purpose was to help residents understand how reappraisals would impact their taxes.
That document stated, “Keep in mind that any new levies that passed in May or could pass in November are not part of the HB 920 calculation during the first year of their existence (which will be next year).”
House Bill 920 essentially “freezes” the amount that can be collected on voted levies to the dollar amount collected in its first year. If property values go up in subsequent years, the millage is reduced so the tax revenue remains the same.
In an undated letter from Dropsey to the Madison Local School District, he apologized for the wording of that sentence.
“The sentence should have said, ‘Keep in mind that any new levels that passed in May or could pass in November may not be part of the Department of Taxations’ HB920 calculation during the first year of the new levies existence,'” the letter states. (italics added)
“I am sorry for any confusion or anxiety that this misstatement caused to the Board and/or the Administration.”
Board voted ballot language included the $2.9 million figure
A week after Dropsey certified the amount the levy would generate at $2.9 million, the Madison Local Schools board of education voted to approve a resolution to send a November levy to the ballot box.
The resolution included Dropsey’s calculation of $2.9 million.
Archived sample ballots from the Richland County Board of Elections show the ballot language also included the $2.94 million figure.
So where did the district’s $3.36 million estimate come from?
“Basically, what we were doing was taking the $2.9 million and multiplying that by a conservative appraisal increase,” Peterson said.
“Ultimately, the responsibility for those decisions fell on (Treasurer Bradd Stevens’) and my shoulders, but we did go to (Dropsey) because of his expertise and experience dealing with property taxes.”
Despite the discrepancy, Peterson said he would have felt worse if he told the public the levy would generate $2.9 million and it ended up generating more.
“If had I known that it was only going to generate $2.9 million clearly, I would have never shared the $3.6 million number,” he said.