Bowling Green City Schools is taking steps to change a law that allows townships to switch districts – and take their tax dollars with them.
At Tuesday’s special meeting, the school board spent 70 minutes in executive session debating the merits of the changes suggested by their financial adviser, David Conley.
A motion was passed to have Bricker & Eckler prepare the appropriate legislation.
On the advice of Conley, the district is proposing a new law that will require those townships that vote to leave the district remain liable for their taxes to Bowling Green for at least 10 years. They would also be responsible for the taxes in their new district. The law change would be retroactive for those petitions that may pass in August.
“I think it’s fair and appropriate to seek a law change,” Conley said.
Rebecca Princehorn, with Bricker & Eckler, agreed that the discussion should be in executive session, stating the district has been in litigation once over the issue of petitions and this move could prompt additional lawsuits.
This is something the state legislature has seen before, and won’t be a novel concept, Princehorn said.
“They can try that, but I don’t believe it will be legal,” said Scott Apple, who circulated three of the petitions.
Karen Young, deputy chief auditor for the county, said her office would defer to the Ohio Department of Taxation.
‘That is something that we have not been challenged with,” she said. ‘We don’t do it now because it’s not law or uniform taxation.”
Board member Jill Carr pointed out petitioners would have no say in this law.
Conley had harsh words for those people wanting to leave the Bowling Green school district.
“In my opinion, this situation is simply unwarranted and indefensible,” he said.
Usually with property transfers, they are done by residents wanting their children to attend another school district, Conley said. But in this case, in all five districts that the petitioners want to move to, each school offers open enrollment, which means children can go there without a property transfer.
State Rep. Haraz Ghanbari, R-Perrysburg, attended the meeting held via YouTube. After the meeting, he said he is committed to continued dialogue with school board members, district leaders and district residents.
“The House of Representatives offered a solution through an amendment to Senate Bill 89; however, the Senate has not concurred and they have not appointed conferees to Conference Committee,” he said.
Of the more than 10,000 taxpayers in the district, there are about 1,025 registered voters living within the petitioning townships; 513 yes votes will be needed for all to transfer.
“Based on the way the current law is drafted, potentially 513 votes could actually change the structure of the financial picture of the school district for more than 10,000 remaining taxpayers,” Conley said.
“Only those residents will be able to vote,” he said about those in the five townships in question. “No other resident has a legal voice in this process. There is no representation by any of your other residents and taxpayers in the Bowling Green schools.”
That will leave 10,000 taxpayers to pick up the slack from the property and income taxes that will shift out of the district with the transfers.
Board member Bill Clifford pointed out a transfer will only happen in those townships that approve it. Consequently, the $3 million loss in revenue if all eight petitions are approved is worst case scenario, he said.
Residents in Liberty, Center, Plain, Jackson and Center townships have had petitions approved for the Aug. 4 special election.
“All residents of the Bowling Green school district are contributing to the financial stability of the school district,” Conley said.
When a property transfer occurs, taxes will stop being directed to BGCS and go to the new district.
“The loss of those tax dollars to Bowling Green schools will more than likely present a significant financial hardship to the school district and likely to the remaining residents,” Conley said.
He has estimated $2 million could be lost in property taxes, $260,000 in income taxes and $675,000 in pipeline taxes if all eight petitions are approved in August.
That equates to 4.5 mills in new property taxes needed to keep the district running as it is. With the median home value at $162,900, that would amount to $256.57 in additional taxes every year.
“This revenue has been a part of your budget for many years,” Conley said. “This is part of your financial existence.”
Board President Ginny Stewart wanted to know if there was any way to protect the remaining taxpayers.
“As it stands, current law does nothing to protect the remaining taxpayers,” Conley said. “We’re faced with a situation where a law allows for as few as 513 voters to impact more than 10,000 taxpayers. That does not seem equitable or representative in my opinion.”
Board member Tracy Hovest asked about bond payments for those who do transfer to another district.
Bond taxes currently collected in Bowling Green will still need to be paid even if the taxpayer transfers to a neighboring district. They also must pay any bond taxes in the new district. Bonds still owed in Bowling Green won’t be paid off until 2033, Conley said.
Four of the five districts petitioners want to transfer in to have facility bonds residents are still paying.
The loss of taxes is compounded by the state’s cut in school funding in May and the expected loss of income tax revenue caused by unemployment during the coronavirus “stay at home” order. Those losses could total $3 million based on Conley’s estimates.