School districts that pass levies often are unable to collect every dollar when expected, a newspaper analysis revealed.
While the shortage in collections usually won’t hurt districts in the short-term, unpaid taxes can lead to difficulty forecasting a district’s annual budget, school officials said.
The newspaper surveyed all 14 school districts in the region’s eight-county area that passed a levy in 2012, and of the 12 that already have started collecting, five reported shortages based on first-half collections in 2013.
Eventually, the money finds its way into the school districts’ coffers in the form of delinquent taxes, but predicting how much a district will receive each collection is an “an inexact science,” said Steve Clark, Kettering City Schools treasurer.
“I think what you’re seeing in Dayton (region) can be mirrored throughout the state,” said Jeff Chambers, communications director for the Ohio School Boards Association. “Clearly, the first ramification is if they were counting on those revenues in their five-year forecast once it passed, and the actual revenues are not matching up to expectations, they need to either reduce expenses or look for other avenues for revenue.”
The other two school districts — Miami East and New Lebanon — do not begin collecting for their renewal levies until 2014, school officials said.
Of the three school districts where voters approved additional money, only Mad River had a shortage. Monroe and Yellow Springs collected what they each projected.
“It’s not a problem with our new levy,” Mad River treasurer Jerry Ellender said. “It’s more of an economic plight with the housing market, the number of foreclosures, the number of abandoned homes, that taxes probably aren’t being paid upon right now and it’s affecting our collections.”
Mad River’s 5.9-mill continuing levy approved last March was projected to generate $1.4 million annually in new money for the district, and the first half ($697,710) was to be collected this spring. The actual collection finalized, including delinquencies, was $484,305 — a shortage of $213,405.
Ellender cautioned that the shortage is not just from the most recent levy passage, but a part of the district’s overall collections. County auditors do not track tax revenue collection by individual levies.
“Once you pass a new levy, (the county) starts assessing more taxes than they did before,” Ellender said. “A new levy is not assessed separately. There’s no way to know if it came from a new levy or an old levy on the books.”
Fairborn, which has been in fiscal caution since Jan. 14, passed an 8.4-mill emergency operating renewal last March to raise $5 million annually. The district said it collected a little more than $2.3 million in the spring of this year.
Treasurer Eric Beavers said it’s “not uncommon” because what the district receives is “obviously dependent on who pays taxes.” Fairborn residents should expect to see another levy on the ballot in November.
“If we wouldn’t collect it all, that causes us to have a shortfall in our revenue,” Beavers said. “It doesn’t always come in when it’s supposed to come in. But typically we do get those delinquencies that are paid in arrears.”
During the first half of this year, Clark estimated the general fund tax revenue would be a little more than $30.5 million for Kettering, including the renewal levy. The actual tax revenue collected was $31.3 million, and Clark said some taxpayers may have paid 100 percent of their tax bill in the first half rather than paying half.
Clark said that could help the district keep the millage rate down in November when it plans to ask voters for additional operating dollars.
“It’s hard to estimate tax collections because it varies from collection to collection,” Clark said. “You don’t know who’s going to pay. There’s a lot of moving parts.”
Voters in the Monroe school district in Butler County approved a 7.05-mill emergency levy in November that will generate $2.5 million annually for five years. The owner of a $100,000 home will pay an extra $215.91 in taxes annually.
The district collected half of that $2.5 million amount in the spring, and that figure included delinquencies and homestead/rollbacks, treasurer Holly Cahall said.
Cahall said about 10 percent of the collections was delinquent, which makes up for the current delinquent taxes. About 70 percent of Monroe’s revenue is local.
“We met our projections, and we’re pleased about that,” Cahall said. “We try not to overestimate, and then be pleasantly surprised. Sometimes things happen and it can affect our cash flow.”
A closer look at education
The newspaper contacted all 14 school districts in the Dayton region that passed a levy in 2012, requesting what each one projected it would generate and what was actually collected.