On Monday the commissioners agreed to send new Ohio Tax Commissioner Patricia Harris — former commissioner Jeffrey McClain retired in December — an invitation to discuss the matter.
“The board of commissioners invites you to Butler County to discuss the state’s process in evaluating and applying the appraisal assumptions of the local counties and identifying and assigning the Department of Taxation’s assumptions to a county’s property appraisal,” the letter reads.
“With a capable and skilled county auditor and staff, the board wants to understand the Dept. of Taxation’s process and its statutory requirements when supplanting knowledge and familiarity of regional economic influences effecting local property values.”
The commissioners acknowledged the value increase hasn’t been mandated yet, but new county Auditor Nancy Nix is anticipating — based on early communications with the state — she will be forced to increase property values an average of 24%.
Real Estate Director Mike Stein has said for the triennial reassessment, “we basically review by neighborhoods in the county, we use the sales data as we do for the annual review and the state will come back and calculate ratios and averages, and the first half of 2022 the ratios came back at a 24% increase.”
The letter to Harris indicates they want to discuss the impact the coronavirus pandemic has had on the real estate market, “a topic of discussion may be do the current economic circumstances warrant a unique interpretation of post-COVID recovery and a reframing of economic principles on property valuations.”
It later goes on to say, “the world, nation, and most applicably, the state of Ohio is recovering from a pandemic that economically devastated Butler County residents and businesses. Let’s not bring greater harm to these families and businesses as all recover in a new economic normal post-COVID.”
Dixon told the Journal-News when the pandemic first hit and droves of people were quarantined the rules of supply and demand kicked in, “they were bringing 10%, 15%, 20% above appraisal prices just because there was no supply, so that was the after COVID effect that we’re now in.”
“The numbers don’t really reflect what the true value is, they won’t stay there,” Dixon said. “Recently when you look at sale prices you’ll see when you go by a new subdivision, reduced pricing, new pricing, lower prices. Sales are slow, prices are going down, so the prices that people paid during the top of this COVID situation are not real numbers.”
During the state-mandated 2020 reappraisal, all 165,000 Butler County parcels were reassessed and the state ordered an average 20% increase. Former Auditor Roger Reynolds fought a historic battle with the tax commissioner over the mandated increase because he said the state’s methodology was flawed. He said the state relied too heavily on 2019 sales instead of a three-year sampling. He lost.
The state Board of Tax Appeals said the tax commissioner’s appraisal process is not only supported by state rules but “comports with standard appraisal practice and existing real property valuation law.”
Several people have commented the state has an ulterior motive for wanting large property value increases, “I just don’t know where they come up with that figure, what the basis is of that figure except that they just need more money,” Commissioner T.C. Rogers said previously.
The state does not receive property taxes, but Nix said, “the state does factor local tax values and valuations into their school funding formula, which does impact the largest portion of the tax distributions.”
Rogers, who has been in the real estate business for 52 years, said they were seeing multiple offers on a given property above the asking the price and “okay well that’s the market, but that’s just not a normal thing we’ve seen in real estate purchasing as long as I’ve been doing it.”
Nix told the Journal-News last week it is premature to do anything at this early juncture, and “we don’t want to get crossways with the state, they obviously do hold our value increases in their hand.”
Rogers on Monday said, “there’s been some mention that we don’t want to upset the tax administrator in the state because we have to work with them, we’re not trying to upset them, we believe no matter what the business, no matter what commodity, if you’ve been getting a certain price and you’re going to get a 25% jump in the next year you’re going to question it and that’s what we’re doing.”
Gary Gudmundson, communications director for the Ohio Department of Taxation, said Harris would not comment on the commissioners’ invitation because she hadn’t received it yet.
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