The area has at least five examples of substitute levies — including two in the Monroe Local school district, which is in Butler and Warren counties along the fast-growing I-75 corridor.
“It’s not been a hard thing here. People love their schools and they trust us,” Holly Cahall, treasurer in the Monroe district, said last week.
Other area districts with substitute levies include Middletown, Edgewood, Miamisburg and Northwestern.
MORE: Edgewood school seeking substitute levy
Complexities require explanations
Even financial officials acknowledge the complexity of the substitute levy.
This presents a problem for levy campaigners charged with coming up with an effective, yet simple, explanation for local property owners who will be footing the tax bills.
“I kind of try to simplify it,” said Cahall, previously with the Wilmington City Schools.
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First, Cahall said she explains that people already paying on the existing levy should not see their bills go up after passage of a substitute levy. Their bills go up only through reappraisals or changes made by a county board of tax revision, Greene County Auditor David Graham told said in an interview preceding the May election.
Then, Cahall said she adds that the taxpayers get to continue benefiting from a 12.5 percent credit on tax bills given to property owners paying on levies passed before November 2013. New property tax levies no longer come with these credits as a result of changes made in the 2013 biennial state budget.
In addition, substitute levies enable districts to collect full taxes on residential and commercial properties improved after passage, unless they are exempted through tax abatements or other incentives.
Existing fixed-sum emergency levies, like those that would be replaced by substitute levies to be sought in November in Springboro and Beavercreek, fix the total amount, or sum, that can be collected. In Springboro, this is slightly more than $7.9 million; in Beavercreek, $10.4 million.
In Monroe, school officials also reduced the amount to be collected from $2.5 to $2.2 million, reducing the millage from 8 to 7 mils, Cahall added, in exchange for it becoming a continuing levy.
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“We gave them the reduction if they gave us a continuing,” Cahall said.
With substitute levies, bills on existing properties stay the same but grow for those improved by new development.
Renewal of the existing levy would probably result in bills going down over time, assuming values rise and the district tax base grows.
So far in the Monroe district, the substitute levy replacing the 2010 levy has raised annual collections by about $500,000, from about $3.5 to $4 million, Cahall said.
“It takes a while. It’s still something,” she said.
Beavercreek looks ahead
In Beavercreek, the board still needs to decide what to do next, after narrowly losing in the first stab at passing a substitute levy.
Superintendent Paul Otten said he would recommend the board give the substitute levy one more try before considering seeking renewal of the existing emergency levy.
“The district is positioned very well to take advantage of what the substitute levy provides for the district,” Otten said.
In the Beavercreek Twp. portion of the district alone, 2,500 new single-family are to be built in coming years, Otten said.
In explaining the difference between the two levy types to voters, Otten uses an analogy to a carload of four people charged $20 for entrance to a drive-in movie theater.
If a fifth person jumped in, the rate would drop to $4 per person. The theater — or school district — loses the extra revenue.
Otten said the reduction taxpayers get as years pass on a fixed-sum levy is “minuscule,” compared with the financial benefits from fully taxing new development.
This can delay the need for additional levies.
“We actually don’t have to go back to the voters as often for more money,” he added.
In November, Otten envisions a more complete campaign, explaining the pros and cons of substitute vs. fixed-sum levies.
“Some individuals thought we were trying to sneak it through,” he said, adding that there was no formal campaign for lack of a committee or funding.
Instead, the district mounted an educational effort, he said.
“Our next approach will definitely be more aggressive,” he said. “Getting it out there so people can understand it.”
Springboro to seek substitute levy
On Thursday, the Springboro board is expected to take the first step toward seeking a substitute levy in November, despite Beavercreek’s setback.
“Yes we are still prepared to go forward with language next Thursday,” Treasurer Terrah Floyd said via email.
Springboro voters rejected five consecutive levies seeking new operating money, before approving a renewal.
MORE: Conflict shadows Springboro school success
While maintaining a substitute levy was not a “new tax,” Floyd said the district was also going to need new money “at some point.”
“I think, when that time comes, we need to look at the future and not always refer to the past. We have a new board, new administration, and have substantially increased our communication with all stakeholders. Things have changed that make it hard to compare the past to now,” she concluded.