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Budget Commission Special Meeting – November 1, 2023

Meeting Details: The Geauga County Budget Commission met in Special Session on Wednesday, November 1, 2023 at 7:00 pm at the County Administration Building, 12611 Ravenwood Drive, Suite A333-A334, Chardon, Ohio. This meeting was in person with a virtual attendance option via MS Teams.

Meeting Attendance: Prosecutor Jim Flaiz, Treasurer Chris Hitchcock, and Auditor Chuck Walder.

Staff Attendance: Chief Deputy Auditor Ron Leyde, Deputy Auditors Tammy Most and Kristen Sinatra, Chief Compliance Officer Kate Jacob, and Fiscal Office Manager Pam McMahan. 

Township/Village/City Staff:

• Aquilla Village Council President Chris Alushef 

• Auburn Township Trustee Gene McCune

• Burton Township Trustees Ken Burnett and Jarred Miller

• Chardon City Council Members Debbie Chuha and David Lelko

• Chester Township Fiscal Officer Patricia Jarrett

• Claridon Township Trustee Jonathan Tiber

• Hambden Township Trustees Bob Kandra and Keith McClintock

• Munson Township Trustees Andy Bushman and Jim McCaskey and Fiscal Officer Todd Ray

• Parkman Township Trustees Henry Duchscherer and Joyce Peters and Fiscal Officer Denise Villers

• Russell Township Fiscal Officer Karen Walder

• South Russell Council Member Dennis Galicki and Fiscal Officer Danielle Romanowski

• Thompson Township Fiscal Officer Cindy Lausin

Other County Staff and Others in Attendance:

• Auburn Township Residents Tom and Diane Jones

• Auburn Township Resident and Candidate for Kenston School Board Joe DeBoth

• Chardon Residents Allen and Judy Keener Observer Note: Mr. Keener is the ADP Chief Technology Officer 

• Chardon Residents Mark and Sharon Madger Observer Note: Mrs. Madger was a Candidate for Chardon School Board at the time of this meeting but was not elected on 11/07/23.

• County Budget and Finance Manager Adrian Gorton

• Geauga Times Courier Journalist Anastasia Nicholas

• Hambden Township Candidates for Trustee Dave Johnson and Mike Romans Observer Note: Both Mr. Johnson and Mr. Romans were elected on 11/07/23.

• Newbury Township Residents Tom and Linda Retych

• Russell Township Resident and Geauga Public Health Board President Carolyn Brakey

• LWV Observers Gail Roussey (virtual) and Sarah McGlone (in person)

Virtual Attendees

• H Delaney (Finance Dept, Chardon)

• J Jare

• Jeff Markley (Bainbridge Township Trustee)

• Jennell Dahlhausen (Burton Township Fiscal Officer)

• Karen Hawkins (Fiscal Officer Montville)

• Katie O’Neill (Candidate for Burton Township Fiscal Officer, elected 11/07/23)

• Kristina Port (Russell Township Trustee)

• Matthew Rambo (Russell Township Trustee)

• Melissa Palmer (Russell Township Administrator)

• Kristina O’Brien (Bainbridge Township Trustee)

• Shelley McDermott (Treasurer’s Office, Chardon Local School District)

• Sharon Sims (Troy Township Trustee)

• Josh Widdifield (ADP)

Observer Note:  The property revaluation (“reval”) and its effect on Geauga taxpayers was discussed at length at the last three Budget Commission Meetings; see the Observer Reports from October 2, October 16, and October 24 for more information. As stated in the Special Meeting Notice, the purpose of this Special Budget Commission Meeting was to meet with Geauga County Local Government Elected Officials and support staff to discuss the 2023 Revaluation Inside Millage Increase. This discussion is summarized below.

The meeting was called to order at 7:03 pm.

The Budget Commissioners opened the meeting with a presentation explaining the inside millage windfall certain Geauga County entities will be receiving due to the increase in property values that will be instituted on January 1, 2024. It was explained that property taxes consist of inside millage, outside millage, and assessments. Inside millage provides funds for local government entities to operate and is not voted upon by citizens. It is capped at 10mills, with 3.0mills going to the local (township, village or city) government, 4.5mills going to the local school districts, and 2.5mills going to the County. Outside millage would be levies that have been approved by the voters. Some taxpayers may have additional assessments, such as for sewer, water or streetlights. Generally speaking, existing outside millage and assessment taxes are unaffected by changes in property value. However, inside millage does change proportionally to changes in property value.

Every six years, the State requires Counties to complete a physical street view appraisal of each land parcel. Appraisers must physically view all properties, and this appraisal information is paired with comparable home sales data for the past three years to determine how much the value of each parcel should change. These rates must be approved by the Ohio Tax Commissioner. After the November election results are certified and any additional levies approved or rejected by voters are determined, a finalized listing of all collectible taxes is sent to the State, and then the State officially sets the final tax rate.

Geauga County’s reappraisal was completed this year. On average, County home values increased by 29.5%. This means the amount of inside millage tax collected will increase by this same amount on average in 2024. The overall inside millage tax increase will be approximately $9.6 million; this windfall will be divided up so that $2.9 million goes to local governments, $4.3 million goes to school districts, and $2.4 million goes to the County. However, the County Commissioners passed a Resolution on October 31 to decrease the collection of two Job and Family (JFS) levies by roughly the same amount as the County’s inside millage windfall. The County Commissioners pledged to restore JFS’ lost levy funding with money from the County’s General Fund. This will result in no tax increase for the County’s 2.5mill portion of inside millage. Auditor Walder noted that West Geauga Schools have been receptive to enacting a similar solution for their school district, and he will be having a meeting to discuss the matter further with West G in the very near future.

The Budget Commissioners asked the local government officials at the meeting to consider “build(ing) trust with your taxpayers by passing a Resolution/Ordinance to reduce collection of a non-qualified outside millage levy to approximately offset your inside millage windfall” in a manner similar to what the County Commissioners did on October 31. Observer Note: Non-qualified levies are fully funded by taxpayers, whereas qualified levies have 12.5% of their funding provided by the State. Therefore,  taxpayers get 100% of the financial benefit of a non-qualified levy reduction, but a qualified levy reduction would result in taxpayers receiving only 87.5% of the levy collection amount returned to them. It was stated that some local governments had already reached out to the Auditor’s Office about ways to mitigate the effects of the property revaluation on inside millage taxes, and Mr. Walder specifically commended the Townships of Chester, Claridon, Montville, Munson, Parkman, and Russell for doing this.   

It was noted that this plan to lessen taxpayer burden would need to be enacted quickly, as any property tax changes must be implemented by the end of November before tax rates are finalized by the State. To enable a quick turnaround time, a sample Resolution to codify this solution was provided to all meeting attendees in hard copy form. The Budget Commissioners promised support from both the Prosecutor’s Office and the Auditor’s Office in order to tailor the sample Resolution to each local government entity’s precise situation, and they strongly advised the attendees to not attempt to create their Resolutions without assistance. The Budget Commissioners noted that, if all local governments in Geauga County reduce levy collection to offset their inside millage windfall, they would neutralize 30% of the inside millage tax increase; this would actually neutralize 55% percent of the total inside millage tax increase when paired with the County Commissioner’s already approved agreement to give its 25% portion of the inside millage tax increase back to Geauga taxpayers. 

At this point, the Budget Commissioners opened the meeting to questions and comments.

Claridon Township Trustee Jonathan Tiber asked if it was fair to say property values are generally expected to increase with each six year reappraisal, but the magnitude of the current increase is unexpected. Mr. Walder replied that it was accurate. Mr. Tiber noted that Clairdon’s inside millage windfall is estimated at $65,000 and asked if it would be fair to reduce a non-qualified levy by $50,000-$55,000 since some increase in property value is the usual expectation. Mr. Walder stated this would be “a service to your taxpayers.” Mr. Tiber also stated his appreciation for the County Commissioner’s amelioration of the County’s share of the inside millage tax increase. Mr. Walder reiterated this sentiment, saying they “did the right thing for the right reasons.” Treasurer Hitchcock said that the Budget Commission’s presentation of their inside millage windfall solution to the County Commissioners and the County Commissioners’ willingness to implement that solution was “one of the proudest moments in my public service. All of the electeds were working together with one goal: to serve the taxpayers.” 

Mr. Walder noted that many Ohio Counties that had their reappraisals this year saw property value increases even higher than those seen in Geauga County. He went on to state that the long-term solution to the inside millage tax windfall problem needs to be crafted by the State, but in the short-term Geauga County is doing what it can to help its taxpayers. Prosecutor Flaiz noted that Mr. Walder has been in communication with State Senator Sandra O’Brien on what the long-term solution might be, and he opined that there is “zero chance” that the Legislature can pass a solution before the new property values take effect on January 1. Mr. Flaiz indicated that the County’s short-term solution will help Geauga taxpayers now and expressed his hope that the Legislature will create a long-term solution, such as finding a way to “even out” property values or capping inside millage increases, sometime next year. Mr. Walder showed everyone the 2023 Tax Reappraisal Estimator on the Auditor’s website that enables citizens to compare their new and old property values and find out how much their inside millage taxes will increase in 2024.        

Parkman Township Trustee Joyce Peters asked what determines if the levy reductions to offset increased inside millage will continue year after year. Mr. Flaiz noted that it will be up to each inside millage windfall beneficiary to decide if they want to continue implementing this solution each year. He restated his hope that the Legislature crafts a long-term solution in the next year, which would make the short-term solutions enacted in Geauga County unneeded in the future. Mr. Walder shared that Senator O’Brien will be having an open house at the Heritage House in Chardon on December 7, and he encouraged people to take that opportunity to share their experiences with the inside millage increase with her. He also noted that he has been talking with Geauga’s other State Senator Vernon Sykes about this issue and said that Senator Sykes has been very responsive as well. Mr. Walder observed that Senators O’Brien and Sykes belong to different political parties but “both sides of the aisle (are) going after this (inside millage tax increase)…. This has nothing to do with party. This is just wrong, and that’s what makes this so easy to fight.”    

Ms. Peters said that she has a Trustee meeting next week and wondered if it was possible to get something ready (a Resolution) by then. Both Mr. Walder and Mr. Flaiz answered in the affirmative and stated each of their staffs would be ready to provide assistance. Mr. Flaiz noted that all of his Assistant Prosecuting Attorneys (APAs) have copies of the sample Resolution and will help draft them for Townships and Villages. He also expressed his willingness to share the sample Resolution with municipal law directors upon request. He advised Fiscal Officers to reach out to the Auditor’s Office for guidance on which levies would be best to draw down. Mr. Flaiz observed that whether or not to reduce levy collection to offset the increase in inside millage is ultimately a decision that is up to each local government entity. Mr. Walder confirmed this sentiment, but he also noted that “it would be outrageous if you have too much cash and you’re … not doing the right thing (reducing levy collection to offset increased inside millage).” He warned that if this were to occur, the Budget Commission may feel it was “our turn to do the right thing” and require levies to be drawn down at the 2024 Budget Hearings.   

Russell Township Citizen Carolyn Brakey thanked the Budget Commission for their hard work. She stated that she initiated a petition a little over a week ago “that says stop the Geauga tax hike,” and she said that this petition has over 400 signatures of local residents representing every zip code in the County. Ms. Brakey stated that it is clear that Geauga citizens do not want increased property taxes. Mr. Walder thanked her for sharing the information about the petition. 

Aquilla Village Council President Chris Alushef said that Aquilla will receive an inside millage increase of only $1,300. He stated that he feels the Budget Commission is “painting this with a broad brush” and “to say that every municipality is created equal with the budget problems” is not accurate. Mr. Alushef noted that, while some entities may have a great deal of cash on hand, Aquilla Village does not because they had to spend “two and half years of revenue this year on roads. We need that money,” referring to Aquilla’s 3.53mill renewal with increase levy that is on the November ballot. He said he was confident that the levy would pass initially, but now he is worried that the levy may fail because people are so concerned about their property taxes going up. Mr. Alushef concluded his comments by saying “I don’t think it’s fair to paint everybody, that this is some life-changing windfall.” Mr. Walder said that it’s each entity’s decision to make as to whether or not to decrease levy collection to offset the increase in inside millage. He said that the Budget Commission is only asking each entity to at least consider this option. He said that the increased inside millage problem is “severe” and suggested anyone who thinks it is not should take the time to research the matter online. 

Mr. Alushef noted that if the Aquilla levy does pass, then they would be in a better position to consider reducing levy collection to offset the increase in inside millage. He asked if there would be enough time to implement this solution if indeed the levy does pass. Mr. Walder said they would have time because the deadline is not until the end of November. Mr. Flaiz concurred, with the caveat that a hypothetical recount would delay the election certification process. Observer Note: The Aquilla levy was approved by the voters on 11/07/23.      

Russell Township Trustee Matthew Rambo, who attended the meeting virtually, asked what happens if the State does implement some kind of fix. Mr. Walder said that HB 187 is before the Legislature now and “it’s classified as a tax relief bill. It’s a ruse. I’ll be quite honest with you. It’s not a tax relief bill.” He went on to explain that the bill would require “the Auditor to reval three years and then average the last three years. And somehow, they think that’s going to lower the rate.” He explained that he does not know what the average would be because he doesn’t have three years of reval information. Mr. Walder said that it takes his office 18 months to reappraise all County parcels for a single year, and he estimated that doing this for an additional two years would take his office two years to complete and would cost $250,000. He also stated that going through all this would likely result in a similar tax bill anyway, or perhaps even a higher one since he noted that home valuations were likely higher in 2021 than in 2022. Mr. Walder asserted that “every Auditor in the State is against House Bill 187 and every Treasurer in the State is against House Bill 187 and half of the schools are,” and he said that he has told both of Geauga’s State Senators that “this is a bad bill.” He also noted that a few weeks ago a Geauga School District “irresponsibly said” that HB187 would pass the next week, but to date the Senate hasn’t even heard it yet. Mr. Walder expressed the opinion that “hanging your hat on something that hasn’t happened yet is a Hail Mary that I’m not willing to risk your tax dollars for.” He pledged that if “a miracle happens” and the Legislature does fix the problem, “we’ll unwind this stuff” if it happens before the tax rates are submitted to the State. However, he cautioned that once the rates are submitted, “they’re locked” and cannot be changed for a year. Mr. Flaiz stated that if a legislative solution is somehow passed in time, the Budget Commission would hold an Emergency Meeting to reject all the submitted Resolutions to suppress levy collections. Observer Note: At publication, HB 187 had passed the House but had not yet been voted upon by the Senate.

Russell Township Trustee Kristina Port, who was an online participant, asked who the Ohio Tax Commissioner is. The Budget Commissioners said that there is a new Tax Commissioner but they were not certain of their name. Observer Note: The Ohio Tax Commissioner is now Patricia Harris. Mr. Walder made it clear that he is “not blaming the Tax Commissioner” for the current situation; he noted that “the housing market has been nuts for three years,” and this is largely the cause of increased property valuations. 

Mr. James McCaskey, Munson Township Trustee, stated that they have a new levy on the ballot and asked if they would actually receive more funding from it than the amount advertised due to increased property valuations. Mr. Walder clarified that the Tax Commissioner has declared that only the amount listed on the ballot would be collected.

A Newbury Township resident asked if all Townships are up to speed on the situation, as there were no representatives from her Township present. Mr. Walder said that Newbury Township had a previously scheduled meeting and therefore those officials were unable to attend. He noted that the Budget Commission sent letters to all entities (including Townships) benefiting from increased inside millage notifying them about how they can offset the inside millage tax increase by reducing levy collection. He stated that Newbury’s Fiscal Officer Bev Sustar had reached out, and she plans to talk to Budget Commission staff about the situation soon. 

The Special Budget Commission Meeting was adjourned at 8:08 pm.

 

More Information and Posted Minutes: Available on Auditor website

Next Meeting: November 6, 2023 at 10:00 am in the Auditor’s Conference Room at 215 Main Street, Chardon, Ohio.

Observers: Sarah McGlone 

Reviewer: Gail Roussey

Submitted 11/6/23

The League of Women Voters of Geauga is a 501(c)(3) nonpartisan political organization that encourages informed and active participation in government, works to increase understanding of major public policy issues, and influences public policy through education and advocacy. They do not support or oppose individual candidates or parties. Learn more about the LWVG at www.lwvgeauga.org.