The Memorial Day tornadoes that ravaged parts of the Miami Valley created a nearly $2 million shortfall in Montgomery County property tax revenues, however, a robust real estate market and an increase in public utility property values will help soften the blow, Auditor Karl Keith said Friday.
During his annual update at Sinclair Community College in front of 70 representatives from various county agencies and organizations that depend on property tax revenue, Keith said Montgomery County’s real estate market is on track to match 2018’s record 9,219 valid residential estate sales.
Through November, there have been 8,492 residential sales, including $167 million in new construction, he said.
“This is the most active real estate market I’ve seen in my 19-year tenure as county auditor,” Keith said. “We’ve seen a large amount of construction and growth, which is an indicator of consumer confidence.”
The uptick in real estate sales comes in the midst of a post-recession trend in the county that has resulted in nearly 25,000 sales the past three years — the highest in any three-year cycle in county history. That figure represents the most real estate sales in the six years between 2008 and 2013, combined, the auditor said.
The county’s been recovering since it lost $3.5 billion in property values in 2011 and 2014, Keith said, adding that the county has since seen a 4% increase in property values. That’s a reason to be optimistic about 2020 property tax revenues, he said.
“So all of that tells us that when we update the values in 2020, we’re expecting to see increases and values reversal from what we saw as a result of the recession,” he said. “We expect to see some increases. It’s too early to say what type of increases we’re going to see, but we do think it’s going to show signs of recovering from the recession.”
Real estate revenue aside, stronger public utility property values will also help fill in the financial gap created by the tornado damage, Keith said. The values are set annually by the Ohio Department of Taxation on properties used for power generation and distribution, and are owned by utility companies such as Vectren and Dayton Power and Light.
The public utility values are expected to increase by 8.4% countywide next year. That value includes 8.2% and 8.4% increases in Harrison Twp. and Trotwood, respectively. Both communities suffered the most tornado damage in the county.
Of the record 15 tornadoes that swept through the Miami Valley on May 27, four touched down in Montgomery County, impacting 10 jurisdictions. The most destructive, rated an EF4 by the National Weather Service, tore a swath from Brookville to Riverside. In all, the Memorial Day twisters affected more than 4,400 parcels of property in Montgomery County — destroying or inflicting major damage to 915 — according to data assembled by the auditor’s office. There were no deaths reported in Montgomery County as a result of the tornadoes.
The $1.7 million in lost property tax revenue came about after Keith’s office reduced the values on 1,200 properties that were damaged by the tornadoes, he said. The remaining 3,200 property owners have not applied for a reduction on their 2019 taxes, Keith said.
INTERACTIVE MAP: Thousands of tornado-damaged properties identified in 3-county area
Although the strong real estate market and increase in public utility property values will offset the loss in revenue, the $1.7 million will not be made up, unless owners rebuild or make significant repairs to their properties, Keith said.
The county’s public school districts are most impacted in terms the lost funds, Keith said, because 60% of tax revenues his office collect goes to them. Trotwood-Madison, Dayton, Northridge, Northmont and Brookville will experience a combined $824,000 drop in tax revenues, as they were the hardest hit. But many of the districts have taken steps to make up for the losses, Keith said.
“You’re talking several hundred thousand dollars; these entities collect millions, and so it’s always a loss, but they’ll have have resources to fall back on” he said.
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