West Geauga Surrenders $2.35M to Budget Commission
The Geauga County Budget Commission ordered West Geauga Schools to suspend collection of a $2.35 million emergency levy Feb. 28.
The Geauga County Budget Commission ordered West Geauga Schools to suspend collection of a $2.35 million emergency levy Feb. 28.
The commission, comprising Geauga County Auditor Chuck Walder, Prosecutor Jim Flaiz and Treasurer Chris Hitchcock, said the money would be returned to voters.
In a March 1 email, West Geauga Schools Superintendent Rich Markwardt said the cut will come from one of two emergency levies the district has on the books. The levy in question passed in 2019 as a renewal of an emergency levy originally passed in 2005.
“The commission believed that West G’s 2025 estimated positive fund balance of $29 million argues against the need for that 2019 levy renewal, believing instead that West G should engage in deficit spending this year to avoid finishing the year in the black as is our historic practice,” he said.
Markwardt said the emergency levy was renewed in 2019 because the district’s five-year forecast projected deficit spending at that time.
However, two factors have significantly improved the district’s financial status — the 2020 absorption of Newbury Schools and this year’s property tax reappraisal, he said.
“The Newbury property taxes increased, by $5 million, West Geauga’s annual revenue while reducing Newbury residents’ taxes by 14 mills,” he said. “(T)he reappraisal of West Geauga property values by the Geauga County auditor … resulted in an average 33% increase in property taxes for West Geauga residents.”
The West Geauga Schools Board of Education earlier voted to suspend collection of $1 million of its allocated tax monies for one year to mitigate the rise in property values.
During the budget hearing, Walder commended the district for returning that $1 million to taxpayers and said he would move to cut the $2.35 million from a levy that would be “less severe and drastic” for the district, considering the district had engaged with the budget commission cooperatively.
Calling the situation a “perfect storm,” Walder said along with the fact the district sits at the 20-mill “floor,” under which tax revenue cannot be reduced, the jump in property values after the latest tax reappraisal was highest for residents in the West G district when compared with the four other districts in the county.
According to a map shown during the hearing, the average increase for residential properties was 34.5% in Chester Township, 33.6% in Russell Township and 30.1% in Newbury Township.
As a result of the reappraisal, the value of property in the West G district rose to $1.2 billion — an increase of $290 million, Walder said.
“It’s just the way the math works. It’s the way the valuation of the homes worked, it’s the way the market moved,” he said. “You don’t manipulate the numbers, you let the numbers tell the story.”
Flaiz said the Ohio Supreme Court helped shape the responsibilities of a county budget commission through case law that gives them authority to determine whether a tax increase serves no other function than to increase the amount of an entity’s budget surplus.
He also expressed concern over the district’s use of emergency levies, which limits the use of funds.
“I think you’ve got to sit down with your board and figure out a way out of this,” he told district Treasurer Karen Pavlat. “You’ve got these two 10-year levies that you’re in the middle of and you can only use them for emergency purposes.”
In an interview March 1, Pavlat said the move to take back the $2.3 million was unusual and a surprise.
“The board’s going to need to look at the impact of this reduction in cash and determine what modifications need to be made,” she said. “They haven’t had time to digest this. I mean, we just had this (hearing) and they haven’t had another (board) meeting since then.”
The district will lose about 7% of its cash budget, she said, but could not speak to further changes in district plans to construct new facilities.
However, Pavlat said the reduction of cash will affect next year’s budget more than this year’s, and the district is disappointed in the decision and never wants to take funds away from students.
Markwardt said the budget commission’s decision will result in a lowering of taxes for district residents, but may force the schools into a deficit spending mode.
“The potential risk in this approach is the impact it may have related to facilities,” he said. “The commission acknowledged that West Geauga’s facilities have significant needs. Whether or not the West Geauga board of education chooses to place a bond issue for new facilities on the ballot this year, significant dollars will be needed for renovation of whatever current buildings remain in service. By reducing the current fund balance, the amount of funds available for such renovations will be reduced.”
