Making tax stories reader friendly... and accurate

Reporters covering Ohio property tax issues make two common mistakes:

  1. They report on the taxes in terms of "mills" far too often, instead of translating the arcane millage rates to dollars and cents that readers can understand.
  2. They take for granted what they are told about the cost of the levies, instead of checking the facts like they would for practically any other news story.

Neither needs to be the case. It's lazy reporting not to do the math. Yet the math can be made simple.

Converting mills to dollars

Here are two basic ways to come up with a quick answer. Pick one method and stick to it until you're comfortable. Otherwise, you'll get confused.

  1. Cost per $100,000 of home value.
    • Multiply the mills by 30.625.
    • Example: 5 mills x 30.625 = $153 a year in taxes for a $100,000 home.
  2. To instead customize for a different home value.
    • Multiply the home value in thousands (150 for a $150,000 home) times the mills, and then times 0.30625.
    • Example: 150 x 5 mills x 0.30625 = $230 a year in taxes for a $150,000 home.

If your numbers are different from what is being circulated on campaign literature (and it will be from time to time), question the source of the literature.

If they don't agree that you're right, ask your county auditor. As long as you follow the steps above, you'll be right every time.

It's important to note, however, that the formulas listed above apply only to the value of owner-occupied homes. That's the number most readers want to know.

If you're ready to learn more, read on.

Ohio property taxes — more in depth

Appraised Value
Nearly all references reporters make to home values should be to the appraised value. This is the value the home would be worth for resale. As a standard in tax stories, you can use $100,000 because readers can easily adjust the amount for their own circumstances. However, this does not prevent you from noting, for example, that the typical home costs $250,000 or $75,000 in the city being discussed. Check with the auditor to determine if the "typical" value is accurate.
Assessed Value
We almost never use this in print. But for background, Ohio real estate property tax rates technically are applied to assessed values. This is 35 percent of the appraised value. There is no need to be concerned with assessed values when dealing with real estate taxes. Other property taxes, such as those on inventories, factor the assessment differently.
Effective Rate
This is the tax rate used to calculate taxes. This is different from the total mills. It is reduced by House Bill 920 (next definition).
House Bill 920
This is the state law that prevents many real estate tax levies from collecting more money as property values increase (much like income taxes grow as incomes increase). Tax issues, though stated in mills, often are seeking a set dollar amount per year. So when values go up, the actual rate goes down to collect the same amount of money. There are exceptions. Cities, for example, sometimes are exempt under their city charters. Also, there is a floor of 20 mills for certain taxes for schools. Once the rate drops so low, it doesn't fall any more. And in a place where property values are falling, House Bill 920 can cause the tax rate to go back up to the original level. Ask a treasurer, auditor or finance director to explain specific situations.
Mill
Why not use the word "mill"? Won't voters see it on the ballot and in campaign ads? Yes, they will see "mill" elsewhere. But the voters will better understand tax proposals if you present them in dollars and cents. Only after clearly explaining the tax proposal in dollars should you use the word mill. An example paragraph lower in the story could read: "The tax will appear on the ballot as a 6.1-mill levy."
Rollbacks
The state pays 10 percent of the tax bill for all residential property owners, and usually a total of 12.5 percent for owner-occupied (non-rental) homes. This shows up on the tax bill as rollbacks. Tax bills for owner-occupied homes are reduced by 12.5 percent. So for every $1 of new taxes approved in a district, a homeowner actually pays only 87.5 cents. The state picks up the rest and pays the money to the district. Don't worry about calculating this. All the tax amounts figured in our charts are for the 87.5 percent, or what the homeowner will pay.
Tax formula
The formulas listed at the top of the page work off of 30.265. I came up with this number to reduce the steps you need to determine the tax amount. One mill is a $1 tax per $1,000 of property. However, the state appraises property at 35 percent of its market value. And the state pays 12.5 percent of the homeowners' property bill, leaving 87.5 percent of the bill for the homeowner. If you multiply $100,000 by 35 percent, and then by 87.5 percent, you come up with 30.625.