Understanding Millage, Taxes and Levies
Let's take a brief look at how levies operate. First, let's define the basic terms:
Mill: A mill is a unit of taxation amounting to $1 for each $1,000 of taxable (assessed) value.
Inside Millage: Provided by the state constitution, inside millage is levied without a vote of the people and limited to 10 mills for any taxing district.
Outside Millage: Also called voted millage, outside millage is voted on by the people. It is revenue collected outside or beyond the 10 inside mills provided by the constitution.
Assessed Value: In Ohio, the assessed value of real estate is 35% of the property’s current market value as determined by the County Auditor.
Full Rate: The total of inside and outside millage.
Reduction Factor: Reduction factors eliminate the effect of changes in valuation due to reappraisals of existing real property. A reduction factor is applied to a voted levy’s full rate, resulting in the effective tax rate of the levy.
Effective Tax Rate: The millage rate that is actually levied on a property.
Anderson Township Millage:
Anderson Township has a total inside millage of 2.00 mills. This consists of 1.16 mills for the General Fund and .84 for the Police Fund. This is the only township millage subject to annual increases and/or decreases in revenue based on property valuations.
Most of the township’s tax revenue is derived from outside millage generated by a 1 mill Road and Bridge levy, Fire District levies totaling 4.35 mills, and Public Safety levies totaling 10.77 mills, which is allocated between fire and police. Due to the application of reductions factors, revenues remain relatively constant during the life of a levy. A levy passed in year one generates nearly the same amount ten years later due to state law prohibiting growth in revenue when property reappraisals occur. In other words, as property values increase due to reappraisal, the effective tax rate decreases. The result is the inevitable need to periodically seek new levies in order to keep pace with rising operational costs, which are subject to inflationary increases.
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 (market) value for every property in the county. The appraised value is determined as of the tax lien date, which is January 1st of the previous calendar year. For example, taxes collected in calendar year 2024 are calculated based on the appraised real property value as of January 1, 2023.
What happens when a tax levy is passed by the voters?
Every levy ballot issue must contain language indicating the tax year and collection year the levy begins. For example, "...commencing tax year 2024, for first collection in calendar year 2025"; taxpayers within the district where the levy has been approved will begin paying what they owe on the tax levy in the year of collection. Additional (new) levies will increase taxes and is determined by the number of mills levied to raise the required revenue. The cost of one new mill to the owner of a $100,000 market value home is $35.00 annually.