Schools push up property values
Hoping to raise more tax revenue, districts appeal low appraisals
By Lucas SullivanThrough February, school districts had filed more than double the number of complaints contesting property values set by the Franklin County auditor’s office than they filed in all of last year.
The districts want the property values raised so they can collect more tax dollars. To show that property is undervalued, they hire lawyers who seek out commercial and industrial properties that were sold at a price higher than the value set by Auditor Clarence Mingo.
School districts had filed 447 complaints through February, compared with 262 complaints last year. April 2 is the deadline for complaining about current property values.
The Columbus school district has paid attorney Jeff Rich about $1 million in the past five years to chase down about $10 million in taxes through complaints filed in tax years 2007 through 2011, according to the school district’s data. That revenue is expected to grow by at least a few million as outstanding complaints are settled.
A dozen other area school districts that also retain Rich — including Bexley, Dublin, Gahanna, Groveport, Hilliard and Olentangy — have recouped a total of $30 million during that same period.
“This is about educating our children, and we make sure everyone pays their fair share,” Rich said. “Someone needs to keep them accountable and honest, and that’s why we’re here.”
The method he and other lawyers use is simple: They gather records of recent so-called arm’s-length property sales — meaning no special deals were involved — and compare them with the auditor’s appraised value. If the discrepancy is large enough, they file a complaint with the county Board of Revision on behalf of the school district.
The board increases the values in almost all cases because Ohio Supreme Court rulings have upheld that arm’s-length transactions set the value of a property.
Rich said his work benefits taxpayers because it can reduce the amount of levy funding school districts need. He said it’s rare for a district to go after a residential property, but it does happen.
His contract with Columbus schools also requires Rich to contest appeals filed by people seeking to lower their property values. State law requires auditor’s offices to notify school districts when a property owner asks to lower a value by $50,000 or more.
Little can be done to combat the school districts’ efforts, said Chuck Bluestone, a lawyer who has represented property owners in complaints. “The one thing I can do is analyze the sale of the property and see if it included the sale of personal property, like beds in a hotel, which should not be considered part of the purchase price when considering taxable value.”
Bluestone thinks school districts are going after properties they wouldn’t have pursued in past years, where the sale price was “minimally higher than that of the auditor’s value,” he said.
Some of the complaints Rich has filed ask for a $5,000 to $10,000 increase in the taxable value of the property, while others ask for increases of $400,000 to $700,000, according to documents provided by Mingo’s office.
Rich said his threshold for filing a complaint has not changed.
Mingo said school districts are just exercising their right to challenge property values.
“They are following the process that is in place, and I can assure the public every case is carefully examined by the Board of Revision and all the necessary factors are considered,” he said.
The increase in complaints does not mean the properties are valued too low, Mingo said, adding that it likely mirrors rising sale prices as the economy improves.
“You have to remember that a complaint filed this year is from a value set as of January 2011, so the market can change,” Mingo said.
It’s also not uncommon for property owners to win an appeal for a lower value through the Board of Revision and then sell the property for a significantly higher amount, triggering a complaint from school districts.
Mingo said the Board of Revision is not to blame for that, because the three-person panel bases its ruling on information available at the time.
“All we are doing here is minding the store,” Rich said. “I think Mingo’s office is doing a fine job, but he can’t catch everything.”
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