MOUNT VERNON — Friday is the deadline for paying real estate taxes, and Knox County Treasurer Sandra Mizer said payments are arriving in a steady stream.
Mizer said she has fielded questions about the tax bills, with most questions relating to reappraisals or to new levies. How much property owners really understand everything that appears on their bill, however, varies.
“I know where most of it goes,” said Elmer Lathey of Centerburg. “The bill explains it pretty clearly.”
Lathey said he understands the breakdown of his taxes in terms of where it goes — schools, and levies such as board of health, senior citizens, MRDD and children’s services — but he’s not exactly sure what the general fund is.
“I’m not real positive on all of the exemptions,” he said. “Now, the homestead exemption, I get that, and I know how that comes about.
“But there isn’t much you can do except pay it, is there?” he asked.
Danville resident Mary Kohl said she and her husband understand their bill.
“We know, because we’re farmers,” she said. “We’re in the CAUV program.”
Kohl said their bill involves classifications for residential use, as well as pasture, corn and hay designations.
The couple gets the reduction for the home being their primary residence, but the Kohls do not qualify for the homestead exemption.
The process of compiling figures for the tax bill is a complicated one, involving formulas, standards set by the state, appraisal values and millage.
The process begins with the market value of a property, which is determined by an onsite appraisal of the property and the sale price of neighboring comparable properties in a particular three-year period. The market value is then multiplied by 35 percent, which gives the taxable value. According to Jonette Curry, Knox County Auditor, the 35 percent number is determined by the state, and is used statewide.
A tax rate is shown on the tax bill. This is the total of all millage in a particular taxing district (city or township). This will vary by taxing district because not all districts have the same number or same type of levies. That tax rate is then sent to the state.
There is also an effective tax rate shown on the tax bill. This rate is set by the state, and is dependent on the classification of the property. The two main classifications are residential and commercial. A third classification is CAUV, or Current Agricultural Use Value. CAUV is based on a formula that takes into account soil type, soil region and use of the land (farming, pasture, timber, etc.).
Homeowners interested in CAUV have to meet certain requirements, and have to apply for the designation annually.
Once the tax rates are determined, the calculations begin. These are shown on the left side of the tax bill. To determine the gross real estate tax, multiply the taxable value by the tax rate, then divide by 2 since taxes are paid semiannually rather than once a year.
There are several exemptions which can lower a tax bill. The line listed as “Reduction” is the difference between the tax rate and the effective tax rate. Every property owner gets this reduction. It is computed in two steps: 1) Multiply the taxable value by the effective rate, then divide by 2. 2) Subtract that number from the gross tax.
Example: Market value $47,640 x tax rate of 61.65 divided by 2 = $1,468.50.
Market value $47,640 x effective tax rate of 49.760237 divided by 2 = $1,185.29.
$1,468.50 - $1,185.29 = a reduction of $283.21.
A second exemption which every property owner gets is the automatic 10 percent rollback. In this example, it is 10 percent of $1,185.29, or $118.53.
Another exemption available is a 2 1/2 percent rollback. This is for property which is the primary residence of the owner. Not every property owner gets this exemption.
The homestead exemption is available to those homeowners 65 or older. Subtract the 10 percent rollback, plus any of the other two exemptions, to reach your net taxes due.
The next set of calculations get tricky, and involve some numbers which only the auditor’s office has. Suffice it to say, these calculations determine the amount of your taxes which are distributed to the county’s general fund, various countywide levies, libraries, cemeteries, townships, schools and fire and emergency services.
To understand these calculations, it’s best to visit the auditor’s office and look at numbers associated with each taxing district.
Once the dollars are paid to the Knox County Treasurer’s Office, how do they get to where they’re supposed to go?
“An apportionment sheet is completed for every entity in the county,” said Curry. “These include schools, townships, etc., and show the amount of money they’re going to get.”
All of these apportionment sheets have to balance with the treasurer’s office.
The Ohio Revised Code allows the auditor’s office to retain administrative fees for some items, such as election expense. Those fees are subtracted from the amount each entity is to receive. Once a net amount is computed, the budget clerk either issues a check to the entity, or transfers the money via direct deposit. In the case of county agencies, such as MRDD board or the health department, the transfer is made on paper because, in essence, all county entities use the same bank account.
The 10 percent rollback, 2.5 percent rollback and the homestead exemption are reimbursed by the state. The auditor’s office completes a report showing how much of these exemptions go to each entity, and sends it to the state. The state then issues a check to the county, township or school.
Once the money is sent to the various entities, they go about speding the money in accordance with their budgets.