How Do Real Property Levies Work?
At the simplest level, the proposed levy is a property tax assessed on owners of residential units, agriculture entities and places of business. The levy is expressed in terms of mills. One mill is equal to $1 in tax on every $1,000 of a property’s assessed value. In Ohio, the assessed value is 35 percent of the appraised value of the property.
The property tax rate is restricted in several ways by the state consitution. The Ohio Revised Code calls for even further restrictions. It allows only 10 mills of unvoted taxes to be levied against taxable value (this is commonly referred to as the 10-mill limitation). These 10 unvoted mills are shared by overlapping political jurisdictions (e.g. county, city, township, special district, etc.). Therefore when a subdivision of the State of Ohio (e.g. a township or fire district) determines that it is necessary to levy a tax in excess of the ten-mill limitation, it must be voted.
Another restriction on real property tax levies is tax reduction factors. Each year, the Department of Taxation calculates effective tax rates based on a system of tax reduction factors outlined in Ohio Revised Code section 319.301 and enacted by House Bill 920. The basic effect is to eliminate changes in revenue from certain voted levies that would otherwise occur when existing real property is reappraised or updated. Reduction factors do not apply to business tangible or public utility personal property. The tax rate that results after the calculation of reduction factors is the effective tax rate.
For more information on general property taxes, please review this publication from the Ohio Department of Taxation.