While the $15 million the Nordonia Hills City Schools will receive under a tax settlement with MGM Northfield Park, approved in October, such settlements from property tax disputes may become more difficult for Ohio's school districts in the future.
Under changes to HB 126, which was passed by both the state house last April and the Senate last month, it will become more difficult for townships, municipalities and school districts to contest property tax values. The bill has been sent to the governor's office.
According to statements from state Rep. Derek Merrin (R-47), currently, local governments can file complaints through a Board of Revision Process. Under the bill, legislative authorities would need to approve the resolution "authorizing their legal counsel to file each BOR complaint but allows resolutions to be grouped together for a single vote."
"To be clear, this bill does not prohibit local governments filing BOR complaints," Merrin stated. "It only requires a resolution be approved confirming the legislative body’s intent to challenge the property value of a parcel."
In addition, property owners would be notified in advance, Merrin added.
However, Nordonia Hills School District Superintendent Joe Clark called HB 126 "a fundamentally unfair law."
"Property owners with accurate property values will pay more than their fair share of taxes for certain types of levies, subsidizing the lower taxes paid by property owners whose properties are undervalued," Clark said. "This result will be unfortunate, not only for school districts, but also for the residential and commercial property owners whose values are accurate."
More:Thousands of Summit County property owners challenged property values. How did they fare?
Nordonia Hills schools treasurer Matt Brown agreed.
"If this law, under its current proposed form, were in place, then the reevaluation process would most likely never occur and the property owners throughout the district with accurate values would then bear the burden for the low valuation assigned to the MGM property," Brown said.
Of Nordonia Hills City Schools 2021 $52 million budget, a little more than 66% comes from real estate revenue, according to information provided by the treasurer's May 2021 five-year forecast. The average capital outlay in 2021 was a little more than $1 million.
Brown said the district hastwo types of cases where they would pursue a property tax appeal. One is with anoriginal compliant filing or filings in which the district is seeking an increase in value due to a recent sale. The second is a counter-complaint filings, where the district believes the value established is accurate and is defending that current value.
"Through these two types of filings the district gained $4,197,684 in revenue, $3,465,000 of that from the MGM filing,saved $174,100 in revenue; and lost $102,400 in revenue," Brown said.
MGM Settlement will be paid in installments
According to Summit County Fiscal Office Records, the multiple lots that make up the harness racing/casino operation at the northern edge of Summit County total about 80 acres and have an appraised value of about $4.5 million.
However, the district said it challenged "the potential undervaluation of the Northfield Park Casino" and used a special procedure in the Ohio Revised Code that allows school districts and other taxing authorities to challenge property values set by county fiscal offices.
MGM has paid $323,000 in property taxes for its gaming operation in Northfield over the past three years, according to Summit County Fiscal Office records. However, the company says it has paid more than $5.9 million during the same time period.
More:MGM Northfield Park agrees to pay Nordonia schools over $15 million in tax settlement
Chad Lahrmer, Nordonia Hills school board president, said that MGM will pay the settlement over a period of years, with the final payment in March 2026. The first payment, just under $3.5 million, was received by the district in October. It will be used to "partially address the long-term facility needs of the district through the funding of a permanent improvement fund."
"Money in this fund must be used for capital improvement projects, repairs of school property and certain equipment items," Lahrmer said. "The Board unanimously voted to dedicate the entire amount of this payment to the permanent improvement fund. This will benefit the local taxpayers as the school district will now not be forced to use general fund dollars for needed repairs which will extend further the district's ability to operate in the black."
Money will be used for capital improvement projects
Matt Strickland, the business director for the Nordonia Hills district, said that the funds "will go towards general repairs and other such projects to offset expenses that would normally come out of the general fund." This includes projects such as roofing, HVAC, restrooms, electrical, doors and windows, asphalt and concrete areas, and more capital improvement projects.
"We have not settled in on any specific projects yet," Strickland said. "For this fiscal year we are in and as mentioned, we are mainly using a portion of the funds to help offset expenses that would typically come out of the general fund. As the Master Facilities Plan comes more into focus, we will have a better idea of where those funds will best be allocated."
More:Nordonia Hills community turns out to begin school facilities planning
The district is currently working with architects SoL Harris/Day Architecture and the Nordonia Steering Committee on drafting a Master Facilities Plan, Strickland said. In addition, the Nordonia Hills schools have applied for "nearly a half million dollars in Ohio Safety Grant funds."
"We are keeping an eye on those results, too," Strickland said.
