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The Accurate Assessment

January 2025

by the Honorable Andrea Weaver, Union County Auditor

More TIF Clarity-The reality of Claw backs

Episode 2

Last month I brought to the gentle reader facts and misconceptions regarding real estate tax exemptions, focusing on TIFs. Before I move on to another relevant subject, I feel compelled to share a bit more information about the hard reality of TIF implementation.

Recall that Tax Increment Financing, TIFs, are a widely used economic development tool that allows for payment of public infrastructure by diverting property tax revenue to a special fund. This fund pays for those costs, allowing for them to be spread out over a large development area and usually over an extended period of time.

But how do TIFs happen? How are they created and are there “Best Practices” for creating them? I would argue that there should be!

Here are the steps that the creating authority must follow:

1. Create the TIF with legislation.
   1. Given the open meeting requirements for public entities in Ohio, typically the content of the creation legislation takes a fair amount of time to develop. There are many pieces and parts to be considered, such as (but not limited to):
      1. The geographic area – maps, parcel #s, total acres, etc.
         1. Purpose – there are different kinds of TIFs – Project TIFs, usually for a blighted area; Incentive District TIFs and more, and all have their own set of Ohio laws governing them.
            1. Duration, and if more than 10 years, the impacted school district(s) must be included.
            2. Level of improvement to be TIF’d.
   2. Form 24 requires a variety of things from the TIF Administrator, not the least of which is copies of that above-named legislation and the completion of a questionnaire. There is a place for my acknowledgment of the application as well as a place for the county treasurer to attest to the current tax payment status of included parcels. Once this is completed, my office sends the form to DTE for their approval.

Note, that at this point, there is no TIF. It legally does NOT exist. It doesn’t become real and enforceable

if/when/until the Ohio Department of Taxation approves it.

This is where the difficulty begins. For reasons I can’t figure out and would love to have someone explain to me, the TIF creators and/or the project developers seem to not want to complete this required paperwork in a timely fashion. They delay in completing the DTE24 form – for months and sometimes years. For one TIF in Union County, I made a nuisance of myself by frequently checking in with the fiscal officer of the TIF Administrator to learn when the DTE 24 was going to be filed. But the property improvements were completed, and folks were living in them before the DTE24 was filed and then finally approved by DTE. DTE has some really smart people that work there, but they have a lot of these approval duties and take their approvals/denials very seriously. So they take their time. Which means it’s often 12-36 months before

we receive their Final Determination (FD) for a given project. So what does that mean? For the above, I had

to “claw back” 3 years of legally-distributed tax revenue from all of those local agencies and schools. It was terrible for them.

Here’s a hypothetical example – in 2021, a local village creates a TIF for Project A. Construction begins. For the next 2-3 years, property taxes are paid and distributed per the enforce levies. Public service agencies such as 911, UCBDD, Mental Health, Health department, school district, etc. – all receive their correct share of the paid taxes, based on the effective tax rate. This is right and true.

The Final Determination finally comes in 2024, after a delay (by either the Village or developer) in filing the DTE24 & a long delay in getting the FD from DTE. Most often DTE views the creation legislation and approves the FD back to when that legislation was executed. So that means the TIF has now been legally “created”, and it requires funding back to that date in 2021. What happens next? The very next calendar year, I am required by Ohio law to REMOVE from all of those public service agencies and schools the monies I had sent to them for the previous 3 years – and put that money into the now-existing TIF fund. It’s called clawing back those tax revenues. Frankly, (my personal opinion) I think this is terrible! All of those agencies legally received those tax revenues and utilized them per their missions. When I have to claw back, they essentially have to give up monies from their current budgets so that the TIF can be funded. The very public entities that are serving the citizens that this fictional Village and its developer claim to want to benefit, are deeply impacted by being forced to give up current year budgeted income. And it’s rarely something they can plan for because I don’t know about any DTE approvals until I actually receive them.

Final comments on this subject – while TIFs and other exemptions certainly have economic development merit – I firmly believe that every tool should be used well. Delaying the filing of the DTE24 form does NOT demonstrate the careful and purposeful use of these tools.

I would encourage the gentle reader to make your feelings known to the local governments that employ economic development incentives such as these, encouraging them to promptly file the required forms. If I had my way, they should be required to file the DTE 24 form with my office the day after they create their TIF legislation. We would promptly complete our parts and send it off to DTE. Then maybe, when DTE finally issues their Final Determination, the timing of the project completion and the diverting of the taxes would happen about the same time – NO Claw back.

There is a lot more than can be discussed about these and other programs. Look for Episode 3 in the weeks to come.

Andrea L. Weaver, MBA, AAS

Union County Auditor

937-645-3003 * www.unioncountyohio.gov * aweaver@unioncountyohio.gov

 Tax Increment Financing (TIFs)

Episode 1 

Fact & Fiction

Ohio authorizes a variety of tax incentives, aka “exemptions” to local governments to essentially lure new development to their region.  Below is a quick description of the more commonly used tools as well as their tax consequences. 

FACT:

1. Exemptions that truly EXEMPT the property owner from paying tax
   1. Abatements:  by definition, an abatement, “abates” or stops the tax from being assessed.  In some cases, the abatement is for the full property’s value; in other cases, it’s only applied to a portion of the property's value, usually its increase in value during a certain time period.  This term is always stipulated in the abatement agreement as well as the kinds of improvements that are exempted from tax.
   2. CRA’s, Community Reinvestment Areas, are examples of this.  These are used by municipalities in Ohio.  They are always for a certain time period, and the abated value is limited by its true ability to increase the property’s market value.  For example, replacing the roof doesn’t qualify as an enhancement to a property.  Appraisal principles call that “maintenance”.
   3. CAUV:  this it the “farm” exemption.  Recall that property tax is calculated by multiplying the property value X tax rate(millage).  This program simply lowers the tax liability for the property by lowering its taxable value = valuing it by the “income-producing ability” of the soils in the farmland, which is always significantly lower than what the property would sell for.  Property owners of land in this program absolutely pay tax – they just pay tax on a lower value, as determined by the State of Ohio.  Ohio recognizes the impact to our food supply by our awesome farm community.   Most of the 50 states have some sort of agricultural program such as this.

1. Exemptions that DO NOT eliminate the tax; rather they RE-DIRECT THE TAX revenue 
   1. Tax Increment Financing – TIFs
      1. These seem easy to understand, but they are a challenge to implement as they require my office to keep track of the parcel value in the tax year prior to the enactment of the TIF, (called the BASE value), and all of the increase in value since the enactment, (the TIF’d value).  
      2. In 2007, after the City of Marysville approved the vast majority of the TIFs in the City, my office felt that the best way to track the changes in TIF value (while making sure the BASE value remains constant as required), was to create a second parcel number for each of the affected parcels.  So all of the TIFs in Union County have 2 parcel numbers – one ending in “0”, the BASE, and one ending in “9”, the TIF parcel.  That way we can track the change in value due to new construction and reappraisal which changes the TIF’d value.   Then when taxes are calculated, the tax bill is sent to the property owner, as usual.   
      3. The tax due is based on the total value of the property, just like with all other parcels.  But we settle/distribute the paid tax based on how much tax was generated by the BASE value and the amount of tax generated by the TIF value.   
      4. The BASE value tax revenue is distributed to all of the enforce levies for that tax district.   The TIF value tax revenue is distributed to the TIF fund for the entity that created the TIF.  
      5. There are other variations to TIFs, but they all do the same thing – divert the paid tax revenue to the TIF fund and away from the voted levies in that tax district.

FICTION:

1. Rental properties don’t pay property tax, FALSE!
   1. Rental property owners absolutely pay property tax, whether there is a TIF in place or not.   While the tenants may not be paying the property tax, their property owners do pay taxes.  Usually commercial enterprises, they simply increase the rents in order to cover any increase in property value (and the subsequent property tax) as assessed by my office.  And those value increases occur either when the value is increased due to new construction or as a result of our 3 or 6 year county-wide updates.  
2. TIF revenue can be used for anything.  FALSE!   
   1. Other things I’ve seen alleged are that the City or Township that created the TIF can use the revenue for pretty much any expense.  Not true - the ways in which TIF revenues can be spent are governed by Ohio law, as spelled out in the TIF agreement. These agreements are very specific in how those revenues can be spent.

There is a lot more than can be discussed about these programs.  Look for Episode 2 in the weeks to come.

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The Accurate Assessment  

by the Honorable Andrea Weaver, Union County Auditor

(June 2024, 4.2)

-Property tax credits-

Ohio offers several property tax credit programs to homeowners:

1. The Owner Occupancy Credit:
   1. Applied to properties that are the primary residence for its owner. 
   2. Requires an application which can be found via link on my page of the County’s website, (https://www.unioncountyohio.gov/departments/Auditor/auditor-forms) 
   3. 2 ½% credit, applied to your calculated property tax liability.
   4. While not a large credit, every little bit helps.  You can find out if you’re receiving this credit by either checking for it on your tax bill (it will say “Owner Occupancy Credit”, or you can find it on the property search website by searching for your parcel and then clicking on the “Where Your Taxes Go” link.
   5. Also, you may apply on the conveyance fee statement, form DTE 100, when you purchase your home.  

1. Non-Business Credit:
   1. This is a 10% tax credit applied to all non-commercial/industrial properties.
   2. No need to apply; it’s automatic

Homestead has undergone a few changes in the past few years.  It allows for a $26,200 valuation credit for those folks who:

1. Are 65 years of age or permanently disabled (per SSA) in the tax year for which they are applying
2. Own AND live in their primary residence as of January 1 of the application year. 
3. Have annual state income not exceeding $36,100 (cy 2024)

Additionally, Ohio law extends an additional benefit to those veterans who are 100% disabled as a result of their military service, regardless of their age.   The Veteran’s Homestead Exemption calculates the tax credit by exempting $50,000 of market value instead of the standard $26,200.    This additional exemption is authorized for veterans experiencing 100% service-connected disabilities.  

One common misconception is that this is something that must be re-applied for each year.   That is true, if you believe your income has changed, putting you over the maximum income requirement.  If your income hasn’t changed, then there is no need to re-apply for the Exemption – it will remain on your property – as long as you own it, and it’s your primary residence.  But this is a self-monitoring exemption, i.e. if your circumstances change, it is Ohio law that you report those changes.

If you have questions about any of these or to see if you qualify, feel free to reach out to us.

Andrea L. Weaver, MBA, AAS

Union County Auditor

 937-645-3003 * www.unioncountyohio.gov *  aweaver@unioncountyohio.gov

So excited to once again receive the coveted Ohio Auditor of State Award with Distinction!  Because of the leadership of my budgetary team, specifically Amy Wesley, Union County has earned this award a number of times, and we are very excited every time!   The award requires many things including a clean audit report and one that does not contain any findings for recovery. It takes a lot of effort, and our success is all due to the efforts of my budgetary team and their leadership with the rest of the county's fiscal officers.

Notice is hereby given that the Union County Data Processing Board, which reviews and considers proposed Union County IT related purchases, contracts, and projects, meets monthly on the second Wednesday of every month. Meetings begin at 2:30 p.m. EST and are held in Conference Room A, located at 233 West Sixth Street, Marysville, OH.

Please contact Wade Branstiter at 937-645-3054 or Union County Auditor Andrea Weaver at 937-645-3003 if you have any questions or would like further information, or if you would like to obtain the latest meeting details.

Andrea Weaver
Union County Auditor
Secretary, Union County Data Processing Board

2025 Tax Budget Waiver

2024 Tax Budget Waiver

2023 Tax Budget Waiver

2022 Tax Budget Waiver

2021 Tax Budget Waiver

Public Meeting Notice

The Budget Commission of Union County will meet annually on the first Monday of August per ORC 121.22(F). See Budget Commission Mtgs Annual Notice for official notice.