Every six years, Franklin County goes through a process called reappraisal.
This process has a tendency to make property owners nervous because they may believe that any increase in value will equally increase their property taxes. This is not the case.
One of the main reasons reappraisal is performed is to ensure that property owners are paying their fair share of the total tax collected by the taxing authority. This process is referred to as "tax equalization."
Recently, the Franklin County Auditor released information that stated property values located within the South-Western City School District could increase an average of roughly 14 percent.
When looking at each property individually, and assuming that the overall value in the school district does increase by 14 percent, one of four things could happen to your property:
1. The value increases by more than 14 percent.
2. The value increases by 14 percent.
3. The value increases by less than 14 percent.
4. The value decreases by another amount.
Each of these scenarios will result in a different amount of tax being collected as detailed:
Scenario 1 -- If the property value increase is greater than the average within the district, it will result in an increase in property taxes paid as compared to the previous year.
Scenario 2 -- If the property value increase is equal to the average within the district, it will result in roughly the same amount of property taxes paid as compared to the previous year.
Scenario 3 -- If the property value increase is less than the average within the district, it will result in a decrease in the amount of property taxes paid as compared to the previous year.
Scenario 4 -- If the property value decreases, it will result in a decrease in property taxes paid as compared to the previous year.
As you probably are aware, one of the school district's primary sources of revenue is property taxes.
As described in the scenarios above, the school district receives roughly the same amount of taxes that the voters originally approved in levies. This explains the difference between the school district's residential voted tax rate for tax year 2016 of 73.15 mills versus the effective (collected) rate of 46.78. As values have increased over time, the millage rate has decreased by 26.37 mills to collect roughly the same amount annually.
The unvoted or "inside" millage rate, however, does directly affect your property taxes.
Every property is assessed 10 overall inside mills. These inside mills are distributed to various taxing authorities where you live, including but not limited to the county, city, township and school district. The school district's portion of these inside mills is 3.85 mills.
If the value of your home increases or decreases, the taxes associated with the inside mills increases or decreases as well.
It is important to remember, however, that you are only taxed on 35 percent of the value of your home. So only 35 percent of the increase or decrease in value is actually taxable.
As an example, if the market value of your home increases or decreases by $10,000 due to reappraisal, the increase or decrease in taxes due to the 10 inside mills would be as follows: $10,000 increase or decrease in market value x 35 percent x 10 inside mills (.01) = $35 annual increase or decrease in taxes.
It is also important to note than any new levies passed in calendar year 2017 will directly affect your taxes paid in calendar year 2018 as well.
The Franklin County Senior Levy, passed on May 2, 2017, will add an additional 0.45 mills to your tax bill. This new tax will increase your taxes whether or not your overall value increased or decreased due to reappraisal.
Hugh Garside Jr. is the treasurer/chief fiscal officer of the South-Western City School District.