Real estate value hikes leading to increased taxes to counties

LIMA — As property values have been on the rise in recent years, counties have begun seeing an impact in property tax revenue, an increase county officials say they are working to keep as low as possible for taxpayers.

The state of Ohio mandates that counties reappraise real property values every six years, with those values updated in the third year of that cycle. With that cycle staggered for counties across the state, some counties have already seen the effects of rising property values on tax revenue while others are just now approaching reappraisal or value updates.

Allen County is among those now in the third year of that cycle. According to county auditor Rachael Gilroy, the tentative value updates that have come in show that the overall property valuation in the county is just under $3.48 billion including abated and exempt property values. This does not yet include new construction valuations and it includes agricultural values at 2023 levels. This currently represents a nearly 18 percent increase over 2023 valuations, which totaled just under $2.95 billion. Of the nearly $3.5 billion in valuation, the taxable amount is tentatively valued at just over $2.96 billion.

“[Once the update is complete,] we submit a tentative abstract to the state with our numbers, with what we’ve come up with, and then we start haggling back and forth with the state on what they think our values should be versus what we have,” Gilroy said. “Our goal is to get about 92 percent of the actual market value of the property assigned to your property. Sometimes we and the state have different ideas of what that number is. They obviously like it higher, but counties are advocating for lower values for our residents.”

Overall, Gilroy estimates that the average rise in property values will be about 26 percent in the county, but she emphasized that the rise in property values will not necessarily rise to that same level given that county officials work to keep those numbers lower to keep tax bills lower for residents. Once those updated values are assigned, they will come into effect next year, with those taxes to be collected in 2026.

Putnam County is in a different situation, with a full property value reappraisal performed last year. According to county auditor Robert Benroth, that reappraisal saw an average increase of just over 30 percent in residential property values. The county uses an inside millage system to collect property taxes, with the county collecting 2.6 mills. Of that, 0.5 mill go to the county Veterans Service Commission, as mandated by state law. While the remaining 2.1 mills go to the county, county officials decided this year to forego that collection for one year, meaning that property owners will only pay the 0.5 mill property tax rate next year.

“That is somewhere around $2.7 million or $2.8 million that they will not collect,” Benroth said. “The reason they’re not collecting it is because our general fund balance is a lot higher than normal. Some of it is good management and not wasting money, and some of it was that the income came in higher because of the increase [in value].”

This decision will only affect 2024 taxes, Benroth said, with the decision to be revisited next year.

“We’ve been blessed and have a good balance right now,” he said.

Auglaize County had a property value reevaluation in 2023, and according to Hope Robey, the real estate department supervisor in the county auditor’s office, residential property values were up on average by 30 percent over the previous values, with some areas going higher.

“With farm ground, they’ve been seeing as high as 110 percent,” she said. “During a reevalutation, you take a lot into consideration. The market, the constructions costs, all of that is in play. People are buying what was a $130,000 property and they’re paying $230,000 for it. That drives the market up and plays a role in our sales ratio studies.”

That increase in property values and subsequent increase in property tax revenue led to an increase of approximately $780,000 in the county’s general fund last year, Robey said.