These filings by Lakota often resulted in property and business owners paying thousands of dollars more in taxes for the land they purchased.
Such tax valuation complaints are a legal option for Ohio school boards and are filed through boards of tax revision of county auditor's offices.Lakota Treasurer Jenni Logan said the practice is not uncommon among the state's 608 public school systems.
“By law school districts and other local governments are permitted to file original valuation complaints or counter complaints with the County Board of Revision,” she said. “Lakota is one of many school districts across the state who participated in filing such complaints — both original and counter — which began several years before I started with this district.”
But some business executives and state and local office holders argue Lakota is harming business development. They complain Lakota has for years pursued higher tax bills for new businesses through filings, subsequent counter filings and eventual tax settlement agreements costing developers larger-than-expected tax burdens before they even open their businesses.
A review by the Journal-News of Butler County Auditor records from 2014 to 2018 showed Lakota filed 117 original tax valuation complaints against area businesses and developers, which is 129 percent more than any other local school district.
The next most active school district was Fairfield, which filed 51 during the same period, followed by Middletown, which filed 48, and Talawanda at 37. Some of Butler County’s school systems filed zero complaints during the period.
Business owner Ray D’Alonzo was surprised when Lakota filed a valuation complaint soon after he purchased property in Liberty Twp., where he eventually built a Tide Cleaners shop off of Cincinnati-Dayton Road.
Originally, he was expecting to pay $400 in property taxes for then then-dirt-and-grass lot. But after Lakota officials filed their tax valuation complaint, he eventually saw his property tax bill jump 3,900 percent to $16,000.
“Being faced with a large tax bill at a time when money was tight and my (business) doors would not be open for months to come to collect any revenue was not exactly what I would call a friendly welcome to the community,” D’Alonzo told the Journal-News.
The loss of potential business development – and possibly jobs, commercial tax revenue and ancillary business growth – caused by the practice hurts the local economy in the Lakota community and beyond, said some public officeholders.
“A small number of school districts in Butler County continue to chase sales even though the practice is anti-business and discriminatory,” said Butler County Auditor Roger Reynolds.
“School districts hire contract attorneys to aggressively pursue real estate sales in an effort to increase the property value and raise the new property owner’s taxes. The general consensus is schools only target people moving here from out of town, which I believe to be an unscrupulous policy.”
The Lakota Board of Education voted in March 2019 to halt its practice of sales chasing for one year. Board member Lynda O’Connor wanted stronger action.
“I actually called for stopping the practice. However, I support a moratorium for other board members to gain a greater understanding of the impact of the practice,” O’Connor told the Journal-News.
That may happen later this month when the Lakota school board is scheduled to vote on whether to continue the moratorium or add further restrictions, which now include no filings on residential property and no filings against business owners who reside within the district.
O’Connor contends the long-standing practice is a Lakota tradition that should end.
“The valuation challenge practice has been a source of contention and opposition long before any of us came on the board. Several in the business community have told me they view it as coercionary,” said O’Connor.
“It’s lawful, but it creates an adversarial relationship between businesses and schools.”
Ohio Rep. George Lang, R-West Chester Twp., agrees.
“West Chester and Liberty have worked hard to become the most business- and developer-friendly community in the state and have earned the reputation of being so,” he said.
He is concerned those actions from 2014-18 have changed the reputation of the area and the district.
“A developer recently told me West Chester used to be the most business-friendly community in southwest Ohio. But with our reputation driven by the actions of the school board, capital will dry up for new investment in our communities and that will hurt the school district in the long run,” he said.
While there is a general consensus of support for school systems offering tax abatements to larger businesses and corporations as a lure to bring hundreds or thousands of jobs to a local school system, critics said in comparison, smaller businesses are treated unfairly.
“Basically,” D’Alonzo said, “the big guys get the big tax breaks and the little guys get screwed.”
The story so far
What is 'sales chasing'? A review of records by the Journal-News found Lakota Schools has more than twice the tax valuation challenge filings against businesses buying property in the district's two townships of West Chester and Liberty. It is known as "sales chasing," and is meant to force those property buyers to pay higher taxes that benefit the district, critics say.
What critics say: Some business leaders and politicians say Lakota has for years overzealously pursued higher tax bills for new businesses through filings, subsequent counterfilings and eventual tax settlement agreements costing developers unexpectedly large tax burdens before they even open their businesses.
What Lakota says: Lakota Treasurer Jenni Logan said the practice is not uncommon among the state's 608 public school systems.
How much does it happen? From 2014 to 2018 showed, Lakota filed 117 original tax valuation complaints against area businesses and developers, which is 129 percent more than any other local school district in Butler County.
School board stopped the practice, for now: Complaints prompted the Lakota school board to vote in March 2019 to put a one-year moratorium on filing original tax valuation complaints against businesses for one year. The board is scheduled to take action on the status of the moratorium in a meeting later this month.
How often does ‘sales chasing’ happen?
Six of Butler County’s 10 public school systems filed original tax valuation complaints with the board of revisions of the auditor’s office from 2014-18.
No other school district based in Butler County filed during those four years.
Source: Butler County Auditor’s Office