Logan County’s auditor is resigning at the end of this month, citing a recent decision by the Ohio Supreme Court that he said is part of a “growing systemic inequity” that could impact property owners statewide.
Mike Yoder has served as Logan County auditor since 1995, but is stepping down at the end of June. The reason, he said, is related to the potential impact of a 5 to 2 decision by the Ohio Supreme Court that he said slashed the value of a senior housing complex, forcing the county to refund thousands of dollars. Officials from the County Auditors Association of Ohio said there’s concern similar entities across Ohio could use the same arguments to slash their property taxes, ultimately raising costs for other taxpayers.
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“It’s an issue that goes beyond Logan County,” said Frances Lesser, executive director of the CAAO.
The case involved Notestine Manor, an 11-unit low-income housing complex that argued the property was improperly appraised at too high a value. The company appealed the county’s appraisal to to the state’s Board of of Tax Appeals, and the case eventually went to the supreme court. The justices sided with the complex’s owners, who argued the complex should have been valued based on the below-market rents paid by the complex’s tenants as opposed to basing the assessment on market values or similar properties nearby.
“This was the final straw for me because I can’t sit here and look the public in the eye and say I treated you fairly,” Yoder said of his decision to resign.
Staff at Notestine Manor did not return calls seeking comment.
Notestine Manor purchased a vacant piece of land in Logan County for $145,000 in 2012, Yoder said. The company then built a roughly $1.5 million housing complex on the site which included a federal capital advance of $1.3 million. The Logan County Auditor’s Office valued the property at $811,120 for tax year 2013.
But court records show the company filed a complaint seeking a reduction, arguing the auditor’s office should have based its appraisal on an approach that used the property’s actual rent and expenses. The county board of revisions agreed with Yoder’s office, and the company appealed to the Ohio Board of Tax Appeals.
At the BTA, Notestine presented testimony that argued there weren’t enough comparable sales to compare to similar properties and that market rates should not apply because of restrictions on the rent the business could charge. Instead of the auditor’s roughly $811,000 valuation, an appraiser who testified on behalf of the company argued for a total value of $75,000, or about $6,818 for each of the 11 units, according to court records. Although Yoder’s office appealed, the Ohio Supreme Court upheld the BTA’s decision in favor of Notestine after a lengthy court care.
The property at 316 Kristina Dr. is now valued at about $165,000, according to the Logan County Auditor’s website.
That decision forced Yoder’s Office to write a refund check for about $55,000. Of that, about $41,000 had to be refunded from the Bellefontaine City School District, Yoder said.
Yoder argued the low valuation means the company was able to slash their share of property taxes, which pays for fire, police and school district taxes, among other services. Under Ohio’s property tax system, when one entity’s taxes are reduced, the burden doesn’t go away, Yoder said. Instead, other property owners in the taxing district pick up the remaining tab.
“Since becoming Logan County Auditor in 1995, I have become disheartened with the direction the courts have taken on uniform and equitable real property valuations and the inability of the Ohio General Assembly to make necessary statutory changes,” Yoder said in his resignation letter. “I can no longer carry out my statutory responsibilities as Logan County Auditor.”
The court’s ruling could impact similar cases across the state, said John Federer, Clark County Auditor.
“We will all be looking at things differently in 2019,” Federer said.
State Sen. Matt Huffman, R-Lima, said he’s in the early stages of drafting legislation to address the concern of county auditors but nothing has yet been introduced.
“This is going to be an issue statewide if we don’t do something,” Huffman said.