MOUNT VERNON — Like Kenyon College, Mount Vernon Nazarene University is largely exempt from paying real estate property taxes on its roughly 400 acres of holdings in Knox County. That is not an unusual situation in Ohio, as support for education is a very old principle in the state.
In fact, the Northwest Ordinance of 1787, which organized this region of the United States, declared that “religion, morality and knowledge are necessary to both good government and the happiness of mankind,” and further stated “schools and the means of education shall forever be encouraged.”
The Ohio General Assembly in 1859 passed a law that exempted from taxation all public institutions of learning. Public in this case does not refer to publicly owned colleges, it means colleges that are open to the general public and serving a public purpose.
MVNU’s property tax assessment is approximately $15.75 million, and would result in a property tax bill of about $773,000. The county general fund would receive the bulk of those taxes, and 3.2 mills, or roughly $51,000, would go to the city of Mount Vernon. City Treasurer James Shipley said the impact on the city’s general fund is not a large one because, for instance, fire and police budgets come from income tax revenues. With a payroll of over $15 million, MVNU, on behalf of its employees, paid the city more than $225,000 in income taxes last year.
Jeff Spear, the university’s vice president for finance, said the labor-intensive nature of the education business leads to tangible benefits to the various governmental services that are part of the community. He pointed out that in addition to income taxes, the employees also pay property and sales taxes that support the community.
“We as a university also pay a number of suppliers directly here,” Spears continued, “as a part of a nearly $40 million budget. Our primary bank is First-Knox, a major taxpayer and employer here. We are also a customer of Columbia Gas and AEP, both substantial property taxpayers. The local water and sewer districts are used by us as well, and we pay directly for such usage.”
Mount Vernon Mayor Richard Mavis said it would be difficult to place a monetary value on the benefits the city derives from having a university. First, he said, MVNU does employ local residents, and there are long-term revenue benefits related to that. Just as important, he said, is the cultural enrichment to the community. Many performing arts programs, art exhibits and lectures are open to the public, and MVNU staff members and students are involved in myriad of local committees and volunteer in the community. Another plus is the opportunity for local residents to further their education and/or upgrade professional skills, certification and licenses without needing to drive to Columbus, Newark, Ashland or elsewhere to do so.
Knox County Commissioner Allen Stockberger said the county’s general fund would benefit if Mount Vernon Nazarene University and Kenyon College did pay property taxes.
“However,” he said, “ I do understand that if these organizations, as well as local churches and schools, for example, would happen to be required to pay property tax, then their dollars wouldn’t go as far. So I guess I don’t have any resentment about them having their tax exempt status. I think it helps them hold down the cost of their tuition a bit, and it’s how the Ohio Revised Code is set up, so it’s not a problem. We’ll work with it.
“Our [county] budget is strained,” Stockberger continued. “However, we’re going to work it out. Having to tighten up your belt and manage a little more carefully are just the realities of life. We’ve been in a mode here, as far as the economy is concerned, in Knox County, for probably the last 10 years, where we’ve been afforded the luxury of continued growth every year. We have not had to cut budgets, we‘ve been able to expand them on a limited basis every year. There’s a correction in the economy right now, and that’s to be expected in life. And I think we’ll work through this. It just takes a little bit of pain doing so. It will be just fine in the long run.”
Knox County Auditor Jonette Curry assisted with this article. Historical information was contributed by John Kohlstrand, communications director, Ohio Department of Taxation.