Paul LambertOriginally published on EducateHilliard Ever since the 1980s, when the population of the Hilliard School District began exploding in response to the Penick vs Columbus Board of Education desegregation lawsuit, we’ve heard the phrase “Hilliard Schools, Columbus Taxes.” It was a powerful sales tool for the new home builders who were banging out houses by the thousands in the parts of the Hilliard School District which had been annexed into the City of Columbus. I remember hearing that phrase in 1979 when we bought our first home in Golfview Woods, one of many neighborhoods which fall into this category. A common misunderstanding is that folks in the Columbus part of the school district pay lower school property taxes, and there has often been some amount of outrage expressed about this mistaken belief - like those homeowner weren’t paying their fair share. More on this later…. But did you know that today, there are folks buying new homes in the Columbus part of the Hilliard School District who will pay higher property taxes than most of the rest of us? Read on if interested… The truth is that everyone who owns property in the Hilliard School District pays the same millage rate to the District. Yes, there are tiny differences due to the property tax stabilization laws from the 1970s, often called “HB920,” which give rise to the “Reduction Factor” and “Effective Rate” we all see on our property tax bills. But the differences are truly tiny. Yet most folks who live in the Columbus part of the district do in fact pay a materially smaller property tax rate than the rest of us. That’s because they don’t pay any property tax to a township. When the City of Columbus annexes parcels, generally at the request of a home developer, they remove those parcels from whatever township they had been part of beforehand. If your Parcel Number, as assigned by the Franklin County Auditor, starts with 560, which is your “Tax District,” then you are in Hilliard Schools and the City of Columbus, but not in a township. So you don’t pay any township property tax. But this is starting to change. Because of the way the annexation laws work, developers who want quick decisions and no resistance from the County Board of Commissioners can use an annexation method called “Expedited Type 2 Annexation,” which requires the parcels to remain in the township. This arrangement worked out between Ohio’s townships and the developers is meant to ensure that the townships continue to have enough revenue to fund the services expected by the people of the township who aren’t going to get annexed into a city. About half of the Hilliard School District is within the City of Hilliard, and nearly all of the City of Hilliard is within Norwich Township. It has been this way for decades because the Fire and Emergency Medical Services for the community has been and continues to be provided by the Norwich Township Fire Department. So folks who live in the City of Hilliard, or the unincorporated areas of Norwich and Brown Townships, pay a township property tax to fund both township services and the NTFD. When Heritage Preserve was annexed into the City of Hilliard, it was a Type 2 annexation, and consequently remained part of Brown Twp. The folks who live there pay Brown Twp property taxes, and Brown Twp pays Norwich Township for the services of the NTFD. A few years ago, development began at Sugar Farms/Renner South, on Alton-Darby Rd north and south of Renner Rd. Because of the water/sewer services agreements with the City of Columbus (this is a whole big discussion all by itself), these parcels were annexed into the City of Columbus, not Hilliard. It’s still in the Hilliard School District (as a result of the Win-Win Agreement, another key factor in how central Ohio developed), and because it also was a Type 2 annexation, it’s now City of Columbus, Hilliard Schools and Norwich Township. This is the first development of this configuration. So it means that folks who buy homes (or rent apartments) in these developments pay Columbus, Hilliard and Norwich taxes. And under a contract between the City of Columbus and Norwich Twp, they are served by the Norwich Township Fire Department as the primary responders, a primary reason why Station 84 next to The Well was built. Police protection and other city services are provided by the City of Columbus.. But that’s not all. When new developments go in, there is a need to build significant infrastructure to support it: water/sewer lines, electrical service, telecommunication, streets and sidewalks. The City doesn’t want to pay for this stuff - that just burdens everyone else in the City. Nor does the developer want to pay for it - that just increases what price they have to sell the new home for and/or decreases their profit. The Hilliard TIF tiff… In some cities, a mechanism called Tax Increment Financing (TIF) is used. A TIF can be applied to both residential and commercial development. Many commercial buildings in Hilliard were constructed with a TIF, especially along Cemetery Rd and Trueman Blvd. With a TIF, a portion of the property taxes that would be paid to the school district, township and other local governments is diverted to the City instead. The City then uses that money to reimburse the developer for the cost of putting in all the infrastructure mentioned. Past leaders of the City of Hilliard felt that taking away tax revenue from the School District and the Fire Department was okay because these new commercial buildings would generate no kids for the schools and few emergency response calls for the fire department. I believe that was flawed public policy, but that’s another conversation. Many would say that this TIF mechanism is a handout to the developers, and it probably is. It’s also a valuable tool that our Economic Development team can use to compete for important commercial projects. Those who want to completely do away with abatements don’t understand that we have to compete for valuable commercial developments - which help fund our city services - with other towns all around the country. If we don’t offer abatements in a prudent manner, we’ll likely get 100% of nothing. But abatements don’t make sense for residential development. We’re not competing for these developments. In fact in many cases, the current residents of the community would be happy if residential development stopped. That’s the reason a group of us got together and fought (successfully!) for a City Charter change to restrict the power of the City to use TIFs for residential development. The current version of this charter section (12.10) requires the City to come to an agreement with the Hilliard Schools and Norwich Twp before putting a TIF on a residential development, and this was first used for the TruePointe development. Consequently, both Hilliard Schools and Norwich Twp receive annual ongoing compensation for approving this TIF. Before this charter change, they likely would have received nothing. But a TIF still means that in a way, every taxpayer in the School District and the Township are participating in the cost of the new infrastructure. The school and township funding diverted has to be made up with more property taxes on everyone. Please don’t fill the comments with “Ax the Tax” rhetoric. That’s a topic for another post. There is another solution: a mechanism defined in Section 349 of the Ohio Revised Code called a New Community Authority. This is a very limited form of local government which can be enacted for a new development. There have been a couple set up, including ones for Heritage Preserve and Tarleton Meadows. Significant among the statutory powers of an NCA is the ability to levy property taxes solely on the authority of the governing Board of Trustees. There are limitations as to the purposes for which this tax revenue can be used - primary to construct the necessary infrastructure. In the beginning, there are no homeowners on this Board, as none of the parcels have yet been sold to new homebuyers. But as homes are purchased, the composition of the Board shifts to having more homeowners. [Disclosure: I have been (re)appointed by the Columbus City Council to sit on Sugar Farms/Renner South Board of Trustees] For the Sugar Farms/Renner South NCA, the Board has set the property tax rate to 6.5 mills. And this is a Special Assessment, not subject to the Reduction Factor. So for a home priced at $500,000, this would add approximately another $1,100 to the normal annual tax bill. It also means that the cost of the infrastructure for this development is being paid for by the folks buying homes there, and not the rest of us. That seems fair. HBAC #172Jordan, Kevin and Tim briefly cover City business over the course of about a week. Sometimes things move just that quickly! Council Retreat 9/25 & 26 9/28 Council Meeting and DSA presents non-cooperation campaign Tax Incentive Review Ccouncil - Ten Pin 9/28 to expected 10/12 cancellation action City Budget ‘27 (public hearing set for 10/26 @6pm) The Hilliard Beacon is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit hilliardbeacon.substack.com/subscribe
