About School Levies

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About School Levies

Understanding School Levies

How are school districts financed?
School districts in Ohio are financed with a combination of federal, state and local funds. At the state level, school districts receive funding from the Ohio Department of Education’s (ODE) general revenue funds and Ohio Lottery profits. At the local level, school districts receive funding from locally levied property taxes. School districts also can receive funding from income taxes approved by voters.

What is a property tax levy?
A property tax levy is the collection of taxes charged on the value of property. Each district must follow a process described in Ohio law in order for taxes to be levied on property within the district. Boards of education propose additional local tax revenues by board resolution. School districts can place a levy on the ballot up to three times a year on specified election dates. If a majority of voters in an election approve the tax, county officials charge and collect the tax under the terms specified in the tax levy proposal. The collected funds are then disbursed to the district. When a levy is placed on the ballot, it must identify as its objective a legally defined school district purpose.

What types of property can be taxed?
Real property subject to taxation includes the buildings and land held by individuals or businesses. Real property is divided into two classes: Class I (residential and agricultural) and Class II (commercial, industrial and all other real property).

What are different types of levies?
Operating Levy
  • For day-to-day operating expenses
  • Expressed in mills
  • For a specified period of time or for a continuing period of time
Emergency Levy
  • For day-to-day operating expenses
  • Expressed in dollars
  • Must generate a fixed dollar amount each year it is in effect
  • Cannot exceed a period of 10 years
Permanent Improvement (PI) Levy
  • Cannot be used for daily operations
  • For improvements with an expected life of 5 years or more
  • Expressed in mills
Bond Levy
  • Cannot be used for daily operations
  • For buildings, building improvements or land acquisition
  • Debt charges are paid on outstanding debt
  • Expressed in mills
Why do some levies also include a piece for Permanent Improvement funds?
A Permanent Improvement levy is used for improvement projects, maintenance and repairs of school property that are designed to last five years or more. Permanent Improvement funds allow the district to continue providing first-rate facilities for our students, staff and community to use year-after-year. Funds generated by a permanent improvement levy cannot be used for operating expenses, such as personnel, benefits and instructional supplies.

What is a mill?
The unit of value for expressing the rate of property taxes in Ohio is the “mill.” A mill is defined as one-tenth of a percent or one-tenth of a cent (0.1 cents) in cash terms. Millage is the factor applied to the assessed value of property to produce tax revenue.
  • Inside or unvoted mills: Millage imposed by local governments without voter approval as defined in the Ohio Constitution. The constitutional limit for these taxes is 1% or 10 mills. Public schools, cities, counties and other local governments within a taxing district are allocated a portion of the inside mills collected within the district.
  • Outside or voted mills: Millage approved by voters. Outside mills are subject to the property tax reduction factor.
  • Effective mills: In the case of real property, a difference can exist between a tax levy’s rate as authorized by the voters and the actual amount of mills charged against a district’s assessed valuation. The effective millage rate reflects the fact that the original number of voted mills has received an adjustment to compensate for the impact of inflation on real property values. 
What is the House Bill 920 factor?
In 1976, the Ohio General Assembly passed House Bill (HB) 920, which reduces the taxes charged by a voted levy to offset increases in the value of real property. This is called the property tax reduction factor or HB 920 factor. The reduction factor applies to both Class I and Class II real property. This means the amount of outside millage taxes collected on property will not exceed the amount collected at the property’s value in the first year the taxes were collected. Although property values may increase while the levy is in effect, the amount of taxes collected on those properties do not increase. The reduced rate at which taxes are collected is termed the “effective” millage.

Why do schools rely on continuing levies?
Continuing levies provide a reliable funding source for schools and is the way a majority of Ohio public schools fund their operations and improvements. They allow the district to plan for future needs, continue essential services and maintain high-quality programming to support the academic, social and emotional health of students.

How does our school tax millage compare to other local districts?
To view a community tax bill comparison of other districts in Cuyahoga County, please click here.

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History

Fiscal Responsibility

  • The district has received the Auditor of State Award with Distinction.
  • The district has worked hard to aggressively contain costs in a number of ways and has implemented several cost-saving measures, including:
    • A retirement incentive in 2019-2020 that yielded four additional teacher retirements, projected to save over $600,000 over a five-year period.
    • An energy conservation capital project completed in 2019 (new lighting, HVAC controls) projected to provide energy savings of $171,000 per year.
    • Participation in the consortium/group purchasing for health care, utilities, food, equipment and materials.
    • Partnership with the City of Rocky River, which includes funding for the artificial turf field, gasoline purchasing and facility usage (ice rink, tennis courts).
    • Refinancing outstanding bonds, which provided a reduction of 1 mill of debt service property tax millage starting in January of 2022.
    • Managing and investing district funds to provide a return on investment within the confines of state law and board policy.
    • The elimination of an administrative position.
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