8/10/11 Triennial Property Revaluations Impact Library Levies
Every three years, the state charges county auditors to revalue property. This tax year, 41 counties, including many of the metropolitan counties in the state, are in a revaluation year. Historically, county-wide property values have rarely dropped, but this year the news is not good.
All but two counties in the state have lost property value. Because the tax reduction computation always looks to the revenue from the preceding year for its target, as the libraries' revenues decline when valuations fall, that lower revenue stream becomes locked in by the tax reduction factor.
For example, if a library anticipated that a 2009 levy of 2 mills would raise $2 million, but reductions in the 2010 reappraisal caused that levy to yield only $1.5 million, then the library will never receive more than $1.5 million (exclusive of the growth from new construction) no matter how much values might increase when the real estate market recovers. A document 
from OLC's tax consultants Driscoll and Fleeter provides more information, and a chart illustrates the changes in tax collection as a result of revaluation.
Many years ago, school districts and joint vocational school districts got the Ohio General Assembly to set a collection floor of 2 mills for their levies. The OLC is looking at the possibility of pursuing similar legislation for public libraries.
There is one remedy which already exists under current law - when values recover, libraries can propose "replacement" levies. A replacement levy has the effect of wiping out accumulated tax reduction percentages and restoring the original authorized rate. It is possible to "replace" an expiring levy. It's also possible to "replace" a continuing levy.
An article about tax revaluations, including the impact on the Columbus Metropolitan Library tax levy, appeared in the Columbus Dispatch on Aug. 7.
