Centerville challenges township on taxes

At issue is distribution of unvoted property tax revenue.

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By Jill Kelley and Joanne Huist Smith
Staff Writer 9:11 PM Monday, August 29, 2011

A resolution to a 40-year squabble between Centerville and Washington Twp. over roughly $460,000 in unvoted property taxes didn’t materialize Monday. Centerville officials claimed its residents get “no discernable benefit” from inside millage they pay to the Washington Twp. general fund and they want that payment redirected to the city.

“All of that money is Centerville taxpayer money, and it really should be spent in the city for the benefit of city taxpayers,” Centerville Mayor Mark Kingseed said. “There is a structural unfairness. There needs to be a structural change so Centerville tax dollars stay in the city.”

The city’s counterparts in Washington Twp. say the inside millage of 0.7 mills — which costs the owner of a $100,000 home $21.44 annually — funds projects and services for both city and township residents.

Those projects include fire department and recreation center administration.

They also include costs associated with Hithergreen Center and Town Hall Theatre.

“For their value, city residents receive more value than their actual tax contribution,” said Mike Barlow, Washington Twp.’s finance director.

The Montgomery County Budget Commission, including County Prosecutor Matt Heck and County Auditor Karl Keith, heard testimony from both sides Monday before tabling Centerville’s request to have the millage redistributed. They said they wanted time to gather additional information on budget projections for both communities.

Heck asked whether the millage could instead go to Centerville City Schools, whose students come from both communities.

Centerville City Manager Greg Horn said that solution would “probably be more fair” than the current situation, which has been discussed since the 1970s.

Steven Hinshaw, Centerville’s finance director, said the city’s request to stop paying inside millage to the township wasn’t made sooner because there was the belief that the two communities would become one.

He said that question was answered after township voters defeated a merger study issue on the November 2008 ballot.

Barlow said he has always perceived the city and township as one community, and added that city residents also are township residents.

Gary Gudmundson, communications director for the Ohio Department of Taxation, said there are many other cities in the county that pay inside millage, but requests to redistribute those funds are rare. In Montgomery County, 13 municipalities pay inside millage to the townships in which they reside.

Nancy Simpson, finance manager for the county auditor’s office, said the inside millage Centerville pays to Washington Twp. is the highest in the county, and that the next closest amount is the 0.54 mills that Union pays to Butler Twp.

Gudmundson said if Washington Twp. can demonstrate that the millage is being used appropriately, it should be guaranteed this millage by law.

“It is not really a matter of discretion,” he said.

But what is up for debate, it appears, is what is appropriate — and accountable.

“There have been varying explanations over the years as to how the inside millage is spent,” Kingseed said. “That is part of the problem; it is difficult to keep track of it.”

Township Administrator Jesse Lightle said Washington Twp.’s use of inside millage is well documented.

“It has been explained multiple times to officials, and publicly as well,” Lightle said.

Barlow said this issue is not just about money or how it is spent.

“Accounting has never been the issue to me,” he said. “It’s been a matter of the city accepting the numbers.”

The Montgomery County Budget Commission expects to meet again in October, and could make a decision then.

Contact this reporter at (937) 225-7325 or jikelley@Dayton DailyNews.com.

Inside millage

There are seven cities and six villages in Montgomery County that pay inside millage (unvoted property taxes) to the townships in which they are located. New Lebanon and Brookville pay two townships. Here are the townships, the municipalities and the amount of the inside millage paid annually:

Clay Twp.: Brookville (0.18), Clayton (0.18), Phillipsburg (0.18) and Verona (0.18)

German Twp.: Germantown (0.18)

Jackson Twp.: Farmersville (0.20) and New Lebanon (0.20)

Miami Twp.: Miamisburg (0.18) and Carlisle (0.18)

Perry Twp.: New Lebanon (.30) and Brookville (0.30)

Butler Twp.: Union (0.54)

Washington Twp.: Centerville (0.70)

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