Wood County Auditor Property Tax Over-Collection

The Wood County Auditor’s Office over-collected taxes in Perrysburg School District on the most recent tax bill in error. The school district was supposed to receive $13 million, but the Auditor’s Office did not adjust the millage rate from last year to reflect the growth of the community and the increase in property values, which lowers the rate needed to collect the $13 million.

On November 8, 2016, Perrysburg Schools voters approved the renewal of a fixed-sum levy authorized to collect $13,000,000. During tax collection throughout 2017 (tax year 2016, payable in 2017) this levy was collected at 16 mills for each dollar of property valuation to collect the $13,000,000 for Perrysburg Schools as approved by voters.

During tax collection for 2018 (tax year 2017, payable in 2018), this levy was again collected at 16 mills instead of the millage necessary to produce the fixed sum of $13,000,000. The 16 mills generated $14.9 million – $1.9 million more than the $13 million Perrysburg Schools voters approved. The actual millage rate to collect $13 million should have been 14.02 mills, not 16 mills.

Collecting property taxes is the sole responsibility of the County Auditor’s Office. Perrysburg School District has no statutory role in collecting taxes.

Because of the error in collection, Perrysburg Schools property owners overpaid an estimated 1.98 mills this year; a $200,000 home was taxed $122.50 more than was necessary. Perrysburg Schools property owners will see a reduction in dollars collected for this levy over the next two years of approximately 3.2 mills and 3.1 mills to 12.8 mills 12.7 mills, respectively; for a $200,000 home, the levy will be collected in an amount reduced by $61.25 on tax bills distributed in 2019 and 2020.

This incorrect calculation was discovered after the Wood County Auditor’s Office had already distributed tax bills. The school district's first request was to refund the funds to taxpayers immediately. In 2011, when the Wood County Auditor's Office under-collected a Perrysburg School District levy due to an error of not recalculating the millage from the previous year, the Wood County Auditor made the correction that same year. However, the school district was told that this option was not available for the over-collection because the Auditor's office would have to manually recalculate the tax rate for all school district properties (approximately13,339) this year and notify taxpayers of the new lower rate and/or refund them the appropriate amount. The Auditor's office stated that the tax rates are calculated at the start of the year and there is no way to use its software to recalculate them midyear. Also, they shared that this would be a prohibitive cost to their office to refund this year.

Through contact with Perrysburg Schools and the Ohio Department of Taxation, the Wood County Auditor’s Office determined a cost-effective solution to this one-time over-collection of property taxes. In dialogue with the County Auditor, Perrysburg Schools advocated for the best remaining option for its taxpayers, given the situation. The Wood County Auditor has the responsibility to determine the remedy.

Regardless of revenue stream irregularities, Perrysburg Schools follows a Board-approved budget and spends according to that plan. No additional spending has or will occur because of this collection error. The Board of Education is currently considering a Reserve Balance Account under RC 5705.13(A)(1), which could provide a way to set the over-collection aside within the General Fund until collections are smoothed out.

The next challenge for Perrysburg School District will be working though the Ohio Departments of Education and Taxation to ensure its artificially inflated local funding does not impact the school district’s state funding allotment over the course of the correction period. Perrysburg Schools understands the frustration and confusion surrounding this issue. We have been working with school district legal counsel and the Wood County Auditor’s Office as the Auditor and his staff prepare to implement their solution.