HR920 and Your Property Taxes

Most homeowners in Euclid saw their property values go down significantly. Mine went down 40%. Don’t expect to see a corresponding drop in your property taxes, though. Only inside millage which tops out at 10 mills and the Street Lights assessment adjust up or down with property values. All voted millage is held to the dollars the levy at the time of passage was designed to generate. That’s because of a state law HR920. The purpose of HR920 was two-fold:

-       - To protect property owners during higher value/inflationary times from paying more than voters approved

     - To protect the entity during down times from receiving less than voters approved

How HR920 Works: Let’s use the Rec Dept as an example. In 1976 two charter levies were passed totaling 2mills. The value was about $300,000. The $300,000 was guaranteed and fixed. Over the next 35 years, as property values rose, the Rec Dept income remained fixed at $300,000 in order to protect property owners. In 2011, those 2mills residential effective rate had dropped to .513341 mills. That was the millage required to meet the $300,000.

HR920 applies to the following funds. The voted millage is followed by 2011 effective residential millage in parentheses. County Jail: .17m (.17) expires 2012; Mental Health: 3.9m (3.841628); County Health: 2.9m (2.856595); Health & Welfare: 4.8m (4.8) expired 2011; Metro Parks: 1.8m (1.818768); Library Operating: 4m (4); TriC: 3.1m (3.082039); Port Authority: .13m (.103340).

Euclid Schools is made up of the 1995 Library Bond, Permanent levies from ’76, ’79, ’85, ’88, ’92, ’99 and ‘05, a 2008 Emergency 10yr levy, and the 2009 New Schools Bond. Added up, they total 88.4m (53.314689).

This is the part of your property tax that does not change with property values. The grand total of millage impacted by HR920 is 122.850 voted mills. The 2011 residential effective rate based on the value of Euclid is 80.3619. After the Owner Occupancy and Residential Rollbacks, the effective rate drops to 71.59 mills. The devaluation of Euclid will likely raise the effective rate to insure funds voters approved at the time of passage. It should not raise your dollars paid though.

Thanks to HR920 property owners have been protected for the last 35 years. Now the tables have turned to protect the funds approved by voters. As a result, don’t expect your property tax to drop by much more than a few bucks. You can find a breakdown of voted millage by visiting the Cuyahoga County Fiscal Officer’s website. Under Schools and Local Govt Data, open the documents DTE 515 and DTE 27.