School Bond and Tax Elections in Ohio

School Bond and Tax Elections in Ohio School bond and tax elections in Ohio occur under two circumstances: To exceed the levy limit cap To issue new bonding.

Laws affecting school finance Ohio bond issue In Ohio, a ballot measure is required in order to issue new bonds for new construction and capital improvements. Before any ballot measure can be placed for bonds, the bonds must be approved by the Ohio School Facilities Commission. [1] Ohio is one of two states that requires school districts to get approval from a state government agency in order to have a ballot question to issue new bonds, the other state is Michigan. The ballot question requirement for bond issues was approved by the Ohio Legislature in 2003.

A school district must undergo an assessment on its facility needs and how much state aid would be needed from the Ohio School Facilities Commission. Also, school districts must have their adjusted valuation per pupil calculated. [2] This is a key benchmark in approving bond measures; school districts that have the lowest adjusted valuation per pupil are given the most consideration towards getting ballot measures for bond issues approved. [3] Under Ohio law, school districts must seek approval for bonds if a school district exceeds the ten mill limit or uses earmarked proceeds of a facility improvements tax that is levied by the school district when declared in the resolution. For bond issues, the tax levy increase rate must not be less than one-half mill for each one dollar of valued property for a period of twenty-three years and that the proceeds of the tax shall be used to pay the cost of maintaining the classroom facilities included in the project.[4] If a school district gets necessary voter approval, then the school district must enter into an agreement with the Ohio School Facilities Commission for the sale and issuance of the bonds. Once the school board approves the agreement then bonds can be issued. Under Ohio law, school districts can ask for the bonds to be issued in installments depending on their financial needs.[5]

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Average valuation per pupil A key benchmark in rating the eligiblity of school districts to issue new bonds is the State Average Valuation per pupil, this is done by the Ohio Department of Education. Officials compute the statewide average valuation per pupil and the valuation per pupil of each school district and send these numbers to the OSFC. This formula calucation is provided to the OSFC in the beginning of July.[6] The statewide average valuation per pupil is calulated by taking the averages of the total valuations of all school districts divided by the total Average Daly Memberships of all school districts as most recently reported in the previous October. [6] The District's valuation per pupil is calculated by taking the district’s valuation of total assessed property divided by the district’s Average Daily Membership most recently reported in the previous October.[6] These two stats are calculated when a school district seeks bonds, by taking the difference of the statewide average valuation per pupil and the district's valuation per pupil. If the school district’s valuation per pupil is less than the average statewide valuation per pupil, the commission multiplies the difference between those amounts by one-half mill times the Average Daily Membership of the district as most recently reported to the department of education for October under division.[6] School districts that have the lowest three year average rating get the first consideration for approval of new bonds. [7]

Ohio ten mill levy limit Ohio is one of a few states that uses a levy limit expressed in mills over a mathematical formula. Ohio has a levy limit on ten mills as school districts in Ohio cannot ask for more than ten mills of assessed valuation. [8] The ten mill limit is constitutionally protected by Article XII, Section II of the Ohio Constitution since 1953.[9] The required referendum for the ten mill limit did not become law until 1999.[8]

Types of levies Ohio has different types of levies that fall under the ten mill limit.

General levy The general levy is used to provide operating funds and is known as an operating levy.

PI levy Levies used for permanent improvements are referred to as "permanent improvement" or PI levies.

Emergency levy An emergency levy is a property tax that serves as a limited operating levy (maximum of five years) proposed for a specific dollar amount. Due to the dollar amount of taxes charged by the levy needing to stay constant, the millage rate increases.

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Bond levy A bond levy is a property tax levy used to provide the local revenue for construction purposes.

Dual-purpose levy A dual-purpose levy is a single ballot issue for both a PI levy or bond issue combined with an operating levy. The issue may be continuing or limited. A PI/operating levy may be either a property tax or a school district income tax, but a bond/operating levy must be a property tax. The board, at the time it seeks the ballot issue, must state how much of the tax levy will be used for each purpose.

County financing district levy A county financing district levy is a property tax levy proposed by an educational service center for the support of a specific program or purpose (such as special education). If approved, the tax is levied on all participating districts in the county.

Incremental levy An incremental levy is a property tax phased in for the full amount of the millage increase; it is also commonly known as a phase-in levy. It is a limited levy, with a maximum term of 10 years. Unlike the operating levy, an incremental levy imposes additional millage on a regular schedule throughout the life of the levy.

Conduct of the bond election, limitations, rules Authority conducting elections The respective county elections board is responsible for conducting elections. All members of a county elections board are approved by the Ohio Secretary of State.[10]

Election dates School districts are only allowed to hold elections during the first Tuesday in November in a even numbered year and the First Monday in November during a odd numbered year.[11]

Needed majority A simple majority is only required to pass any ballot measure in regards to school funding.

Special elections School districts can hold special elections only on the first Tuesday after the first Monday in February, May, August, or on a other day authorized by a particular municipal or county charter for the holding of a primary election, except that in any year in which a presidential primary election is held. School districts cannot hold special elections in February or May, except as authorized by a municipal or county charter, but may be held on the first Tuesday after the first Monday in March. (Ohio Revised Code 3501.01)[12]

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Wording of measures To Exceed the 10 Mill Limit/Bond Issue Shall bonds be issued by the …......... (here insert name of school district) school district to pay the local share of school construction under the State of Ohio Classroom Facilities Assistance Program in the principal amount of …......... (here insert principal amount of the bond issue), to be repaid annually over a maximum period of …......... (here insert the maximum number of years over which the principal of the bonds may be paid) years, and an annual levy of property taxes be made outside the ten-mill limitation, estimated by the county auditor to average over the repayment period of the bond issue …......... (here insert the number of mills estimated) mills for each one dollar of tax valuation, which amounts to …......... (rate expressed in cents or dollars and cents, such as “thirty-six cents” or ”$0.36”) for each one hundred dollars of tax valuation to pay the annual debt charges on the bonds and to pay debt charges on any notes issued in anticipation of the bonds?” and, unless the additional levy of taxes is not required pursuant to division (C) of section 3318.05 of the Revised Code, “Shall an additional levy of taxes be made for a period of twenty-three years to benefit the …......... (here insert name of school district) school district, the proceeds of which shall be used to pay the cost of maintaining the classroom facilities included in the project at the rate of …....... (here insert the number of mills, which shall not be less than one-half mill) mills for each one dollar of valuation?

FOR THE LEVY AGAINST THE LEVY[13]

To Issue an Extension for a levy “Shall the existing tax levied to pay the cost of maintaining classroom facilities constructed with the proceeds of the previously issued bonds at the rate of …....... (here insert the number of mills, which shall not be less than one-half mill) mills per dollar of tax valuation, be extended until …..... (here insert the year that is twenty-three years after the year in which the district and commission will enter into an agreement under division (B)(2) of section 3318.04 of the Revised Code or the following year)?

FOR EXTENDING THE EXISTING TAX LEVY AGAINST EXTENDING THE EXISTING TAX LEVY[14]

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Multiple Questions on the Ballot “Shall bonds be issued by the …..... (here insert name of school district) school district to pay the local share of school construction under the State of Ohio Classroom Facilities Assistance Program in the total principal amount of …..... (total principal amount of the bond issue), to be issued in …..... (number of series) series, each series to be repaid annually over not more than …..... (maximum number of years over which the principal of each series may be paid) years, and an annual levy of property taxes be made outside the ten-mill limitation to pay the annual debt charges on the bonds and on any notes issued in anticipation of the bonds, at a rate estimated by the county auditor to average over the repayment period of each series as follows: ........ (insert the following for each series: “the …..... series, in a principal amount of …..... dollars, requiring …..... mills per dollar of tax valuation, which amounts to …..... (rate expressed in cents or dollars and cents, such as “36 cents” or ”$1.41”) for each one hundred dollars in tax valuation, commencing in …..... and first payable in ….....)?” and, unless the additional levy of taxes is not required pursuant to division (C) of section 3318.05 of the Revised Code, “Shall an additional levy of taxes be made for a period of twenty-three years to benefit the …..... (here insert name of school district) school district, the proceeds of which shall be used to pay the cost of maintaining the classroom facilities included in the project at the rate of …..... (here insert the number of mills, which shall not be less than one-half mill) mills for each one dollar of valuation?

For the bond issue Against the bond issue “[15]

Required notice of bond election There must be no less than 75 days minimum and no more than 95 days maximum notice to the County Board of Elections after a School Board successfully approves a resolution before putting an election on the ballot. [16]

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References 1.

Jump up ↑ "Ohio General Assembly" Ohio Bond Law(Revised Statute 3318.06 Section A)

2.

Jump up ↑ "Ohio General Assembly" Ohio School Bond Law(Referenced Statute 3318.011 Ohio Code)

3.

Jump up ↑ "Ohio General Assembly" Ohio School Bond Law(Referenced Statute 3318.023 Ohio Code)

4.

Jump up ↑ "Ohio General Assembly" Ohio Bond Law(Revised Statute 3318.06 Section 3A-3C Ohio Code)

5.

Jump up ↑ "Ohio General Assembly" Ohio Bond Issue Law(Referenced Statute 3318.08, Sections A and B)

6.

↑ Jump up to: 6.0 6.1 6.2 6.3 "Ohio General Assembly" Ohio Education Law(Referenced Statute 3318.18 Ohio Code Sections A-D)

7.

Jump up ↑ "Ohio General Assembly" Ohio Education Law(Referenced Statute 3318.011 Ohio Code Sections 7 B-F)

8.

↑ Jump up to: 8.0 8.1 "Ohio General Assembly" Ohio School Bond Law(Referenced Statute 3318.06 Section 2(A) Ohio Revised Code)

9.

Jump up ↑ "Ohio General Assembly" Ohio Tax Law(Referenced Statute 5705.02 Ohio Code)

10. Jump up ↑ "Ohio General Assembly" Ohio Election Law(Revised Statute 3501.06 Ohio Revised Code) 11. Jump up ↑ "Ohio Legislature" Ohio Election Law(Referenced Statute 3501.01 Section A and B) 12. Jump up ↑ "Ohio Legislature" Ohio Election Law(Referenced Statute 3501.01 Section D) 13. Jump up ↑ "Ohio General Assembly" Ohio Election Law(Referenced Statute 3318.06, Sections C1 and C2 Ohio Revised Statutes) 14. Jump up ↑ "Ohio General Assembly" Ohio Election Law(Referenced Statute 3318.061 Ohio Revised Statutes) 15. Jump up ↑ "Ohio General Assembly" Ohio Election Law(Referenced Statute 3318.062, Sections C1 and C2 Ohio Revised Statutes) 16. Jump up ↑ "Ohio General Assembly" Ohio Election Law(Referenced Statute 3318.06, Section 3 Ohio Code)

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