Understanding Millage, Taxes and Levies

General Township Service Financial Overview:
Approximately 70% of all Township revenue is derived from property tax. There are two types of property tax, inside millage and outside millage, which is also referred to as special purpose or district levies.

Unique to the township financial structure is the fact that only a township’s General Fund permits discretionary spending. All other township revenue funds must be expended for specific limited purposes.

Springfield Township has a total inside millage of 1.19 mills. This consists of .34 mills for the General Fund and .85 for the Road and Bridge Fund. These are the only two funds in the Township that are subject to annual increases and/or decreases in property valuations.

The majority of the Township’s revenue is derived from outside millage generated by the 10.11 mill and a 2.5 mill Police District Levies, an 8.5 mill and 1.5, 5 year mill Fire District Levies, and 1 mill Road District Levy. Outside millage is prohibited by state law to increase with annual property valuations for residential property so revenues remain nearly constant during the life of the levy because they are assessed against the value of property in the year the levy was passed. In other words, a levy passed in year one, generates nearly the same amount ten years later, because state law prohibits outside millage levies from being subjected to new reappraised values of property, which occur every three years. The result is the inevitable need to increase or replace millage with new levies every few years to keep pace with rising operational costs, which are subject to inflationary increases. Currently the Township is operating on two levies passed in 2001 (one each for Police and Fire), a 2012 Fire Levy, a 2009 Police Levy and a 1997 Road Levy.

The remaining Township revenues come from a variety of sources including: Joint Economic Development Districts and Zone (approximately 10% of total revenue), intergovernmental sources (approximately 8% of total revenue), permits and fees, grants, interest, and tax increment financing revenues.

The Board of Trustees cannot raise taxes. When the Board of Trustees determines that additional revenues are necessary to maintain or increase current service levies, it can decide to place the issue before the voters. A majority vote of the electorate is required to pass the issue.

How levies can affect your taxes: Levies allow voters to choose to raise the money to support the services they demand as residents.

Understanding Levies, Millage and Taxes
Let's take a brief look at how levies operate. First, let's define the basic terms:

Mill: A unit of measure, 1/1,000 milligram, milliliter, millimeter, etc. When talking about taxes, a mill is $1.00 in taxes for every $1,000 of assessed value.

Assessed Value: In Ohio, the assessed value of real estate is 35% of the property's current appraised value by the County Auditor.

How is appraised value determined?
The County Auditor uses real estate sales in the county, specific property characteristics, and statistical analysis to arrive at the appraised value for every property in the county. The appraised value is determined as of January 1st of the year of the assessment.

What happens when a tax levy is passed by the voters?
Every levy ballot must contain language showing the year the levy commences (begins). For example, "...commencing tax year 2001"; taxpayers within the district where the levy's been approved will begin paying what they owe on the tax levy in the year of collection. The amount of millage they will pay ($1.00/$1,000 of assessed value of their real estate's value) is based on the amount of money the levy must collect.

Inside millage is limited by law to 10 mills for any taxing district. Because they are inside mills, these 10 mills can be collected as a levy without being voted on by the people in the taxing district.

Outside millage is all other millage requested that is over the 10-mill limit. Outside mills must be voted upon and approved by the majority of the voters in the taxing district where the tax will be levied. Because of H.B. 920 (passed in 1976), there is a cap on the amount of money a levy can collect. That means a levy can collect no more in the future than it collects during the first year it's enacted.

What is a replacement levy?
A replacement levy allows the taxing district to begin a new tax levy that will collect the entire amount of outside millage the levy requests using calculations based on the current market values of properties.

What is a renewal levy?
A renewal levy allows the taxing district to keep a current levy on the books and collect the same amount of money as when the original levy was voted in.