Penny O’Brien budgeted to pay about $5,630 in annual property taxes when she bought her Sylvania condominium last May.
So when she received a registered letter from the Lucas County Auditor’s Office informing her the taxes could be hiked to $9,950, she was stunned and confused.
“I was just blown away,” she said. “Obviously it will change my budget.”
Mrs. O’Brien, 72, is one of more than 200 homeowners in the Sylvania school district whose taxes could increase because they bought their homes for more than their valuations on the tax rolls. Public schools are allowed to contest the values of properties that sold for $50,000 or more than the auditor’s office says they’re worth, and it’s common practice in Lucas County.
School officials say it ensures that districts receive their fair share of tax revenue, and therefore don’t have to ask voters to approve higher levies to fund school operations.
But county Auditor Anita Lopez contends the schools are asking too much of taxpayers. She’s calling for them to drop their complaints to the county’s board of revision, at least until 2018 when valuations are set to be updated, as they are every three years.
“Sure you can do it legally under the law, but that doesn’t mean it’s right. That doesn’t mean it’s in the best interest of your community,” she said.
Ms. Lopez particularly takes issue with Sylvania Schools, whose complaints to the board of revision rose from 45 in 2015 to 256 in 2016, according to her office’s records.
The board of revision evaluates each complaint and determines a property’s appropriate value, which Ms. Lopez said usually falls somewhere in the middle of the home’s listed value and sale price. If the board finds all 256 properties’ values should be adjusted to reflect their sale prices, the district could receive more than $580,000 in additional funds from tax year 2016, auditor records show.
“It’s not fair. Especially when your school district isn’t financially struggling and you just received a giant levy,” Ms. Lopez said.
Voters in November approved a 5.7-mill levy, which should generate $7.8 million annually for the district.
Sylvania Schools board member Dave Spiess said he understands Ms. Lopez’s position and the concerns of new homeowners, but the district isn’t looking to challenge every real-estate transaction.
It’s the ones that indicate properties are currently undervalued, and therefore under-taxed, that the board is concerned with, he said.
In Mrs. O’Brien’s case her property is valued at about $170,000 and taxed accordingly, but she bought it for $300,000. It last sold in 2013 for $220,000 and was significantly upgraded before she purchased it, she said.
“In the end, I think we’re also looking to protect our tax base and ensure that everybody is paying their fair share,” Mr. Spiess said. “By no means are we being greedy. We’re just trying to protect our tax base.”
If schools wait until 2018 to contest the property values, they wouldn’t receive any related revenue until 2019, he added.
Sylvania Schools Treasurer Lisa Shanks noted the process works both ways. Homeowners can and do file complaints with the board of revision seeking reductions when they believe their homes are overvalued.
She questioned why Ms. Lopez is singling out her district when almost every school district in Lucas County and others across the state question property values each year. She said the reason Sylvania Schools contested more properties in 2016 than in years past is because it previously only filed complaints when properties sold for $300,000 or more above listed value, and now looks at those with deviations above $50,000.
All districts in Lucas County, save for the Ottawa Hills Schools, filed board of revision complaints in the last decade.
Anthony Wayne Schools initiated 99 complaints in 2016 versus 45 in 2015; Maumee complaints grew to 44 in 2016 from 10 in 2015; and Springfield filed 101 complaints in 2016 compared to 22 in 2015. Oregon Schools’ filings were consistent, with 25 in 2016 and 22 in 2015.
Toledo Public Schools was fairly consistent in 2016 and 2015, with 167 and 160 complaints, respectively. But that’s up from 49 complaints from TPS in 2014. Washington Local Schools’ complaints grew to 50 in 2016 from 23 in 2015.
Ryan Lockwood, Springfield’s treasurer, said districts rely on local tax money to keep their schools operational.
Millage rates for school levies are determined based on each district’s total value of property. Levies can’t increase beyond what voters approve, even if property values go up year after year, but they can decrease if values go down.
When a sale indicates a property might be worth more than its current value, school districts often file complaints to ensure the property’s taxes reflect true value, Mr. Lockwood said.
“Schools can’t go without a vote and raise more property taxes, so to equalize everything we go this route,” Mr. Lockwood said.
Mrs. O’Brien said she always votes in favor of school levies when they’re on the ballot because she supports her local district. She said she expected her taxes would increase after the 2016 levy passed, but she called the district contesting her property value “just ridiculous.”
She plans to file a counter-complaint to try to keep her taxes as-is and her budget intact.
“She’s always voted for the school levies; she’s always been a supporter of the schools,” her son, Marty Gallagher, said. “Now she almost feels betrayed because all of a sudden they’re trying to do a money-grab on her.”