1. What are the basics of the combined operating, permanent improvement levy and bond request? How will the dollars be used?
The November 5 request includes an operating levy, which is necessary with or without the building levy, to run the daily operations of the school district. The permanent improvement and bond portions of the levy are for the much-needed modernization, construction, repairs, and renovations that are outlined in the facility master plan.
2. What is an operating levy for?
An operating levy is used to provide money for a school district’s day-to-day operating expenses, including utilities, supplies, and salaries/benefits for staff. The November 2019 operating levy for Loveland Schools is a continuous levy. It will be collected each year, but as home values increase, the tax rate will be reduced in order to hold the payment to the schools at a constant level. This is often referred to as the “tax reduction factor,” or the “HB 920 reduction factor.” HB 920 is a state law that protects homeowners from paying more money in taxes as their homes appreciate.
This taxpayer protection means revenues remain flat for the schools during the life of the levy, but in the normal course of business, operating expenses rise due to inflation and increased educational requirements. This is the reason the schools typically must return to voters and ask for additional operating funds every three to five years.
The last operating levy for Loveland Schools was forecasted to cover four years of expenses, and the district has been able to sustain operations for five and a half years since approval.
3. What is a bond levy or bond issue?
A bond levy is a special tax used to provide revenue to repay the loan, otherwise known as a bond issue, used for school construction projects, and can by law only be used for that purpose. A bond levy remains in place until the bond is paid off, in this case a maximum of 37 years for the proposed master plan.
The last bond issue for Loveland Schools was passed in 1998. It provided the funds to build the current intermediate school, renovate the middle school and add an auxiliary gym and large classroom at the high school. The school buildings have been exceptionally well-maintained over the years, but two separate assessments, including one by the Ohio Facilities Construction Commission, show that the cost of maintaining the Early Childhood Center, Primary and Elementary Schools is more expensive than replacing them.4. What is a permanent improvement (PI) levy for?
Like a bond levy, a permanent improvement levy (PI levy) can be used only for a certain category of needs. Per state law, funds from a PI levy can only be used for the purchase of items that have a lifespan of five years or more (a capital improvement), or to repay financings used to purchase or construct capital improvements. PI funds can be used for building construction, maintenance and repairs, and certain equipment that is designed to last at least five years. For example, they can be used to replace roofs, windows, and HVAC systems, etc. PI levies cannot be used to pay for salaries, benefits, operating expenses, or basic supplies. 5. What will the impact be on our property taxes?
The cost of the 16.78-mill combined operating and permanent improvement/bond levy translates into $587.30 annually or $49 monthly per $100,000 of appraised home value as determined by your local county auditor. For more details, please see the section "Calculating the Tax" on this page
.6. What is a “mill?”
A mill is the unit of value for expressing the rate of property taxes in Ohio. It is defined as 1/10 of a percent or 1/10 of a cent (0.1 cent). “Millage” is the factor applied to the assessed value of property to produce tax revenue.
What’s the difference between the appraised value and the assessed value of a home?
For tax purposes, a home is taxed on its assessed value, not its appraised or market value. The assessed value is 35% of the appraised value as determined by the local county auditor. For example, a home that is appraised at $100,000 by the auditor is taxed only on $35,000.
8. Why is the Board of Education requesting this combined levy now rather than in phases?
The master plan was developed through extensive analysis with subject matter experts and community engagement over the past several years, including large community meetings, targeted focus groups, and a community-based finance committee, which concluded that the chosen plan is the most cost effective for residents. The district is able to take advantage of historically low interest rates at this time and the adopted master plan will be completed in the shortest timeframe possible, minimizing the disruption to students and instruction, as well as the impact of increasing cost of materials and construction over time.
9. Is there another way to generate the money needed other than using a property tax? For example, a sales tax or an income tax?
By law, a school district cannot levy a sales tax. The district evaluated alternatives, including an income tax, but the current plan as presented was determined to be the least costly to the greatest number of residents by a group of community member volunteers. This group worked on various funding options with the assistance of a taxation specialist retained by the Board of Education. The current plan provides the least costly option based on several primary factors: current low interest rates, anticipated (high) future inflation rates, and potentially expensive future unfunded state mandates.
10. How is the district financially accountable and how has it maintained the existing infrastructure?
The district consistently earns accolades for strong fiscal management and excellent record keeping. This includes a high bond rating from Moody’s of Aa2. The district has a solid history of only asking the voters for what it needs and then making additional adjustments to the budget to stretch the dollars. Only 32% of the district budget comes from the state and the remainder is locally-generated revenue. It has been five years since the district asked for operating dollars and at that time promised the taxpayers it would last four years. In addition, the only remaining bond issue in the district will be paid in full within the next five years.
The district operates on an ongoing five-year maintenance plan to ensure safety, provide for upkeep, and to extend the life of the buildings. As buildings age, however, they become increasingly more difficult and costly to maintain.
11. How does our per pupil spending compare to other similar districts?
The state average for per-pupil spending is $11,953/year. As a fiscally conservative district, Loveland spends approximately $1,000 less, but allocates proportionally more to classroom instruction. Compared to other, similar school districts in the area, the district spends less than Mason, Forest Hills, Madeira, Wyoming, Mariemont, and $4,000 less per pupil than Sycamore and $5,000 less than Indian Hill.
12. What happens if the ballot issue fails?
The financial needs and the needs of the buildings in the district will not go away. The facility master plan outlines the repairs, renovations and additions that are needed today; the cost of meeting those needs will continue to increase over time. Without the necessary operating funds, the Board of Education would have to evaluate and execute budget cuts, which would have a direct impact on classroom instruction and the quality of education in the district.