As a result of the 2023 valuation update, several counties have requested all jurisdictions, including school districts, to voluntarily give back millage to reverse the impact of inflationary increases on collections, particularly collections on inside millage. In deciding on this matter, a school district should consider all the various stakeholders with an interest in the school district’s finances. These may include employee unions—who may bristle at a board of education voluntarily decreasing a revenue flow that will pay wages and benefits, along with taxpayers—who may have a long memory when it comes time for the school district to later ask for additional money via a ballot issue.

While a school district can always voluntarily reduce any of its millage, there is no legal authority to require it to do so if the millage is duly approved and the need for the revenue has been shown. Inflation has also impacted school districts’ costs, not just taxpayer values.

The State implemented reduction factors for voted levies during an inflationary era (RC 319.301, 1976) and whittled away levy property tax rollbacks to reduce State outlay (RC 319.302, 2013). However, the State kept the 20-mill floor in place given school districts’ overreliance on voted property taxes and recognizing not every part of the State has growth from new construction yielding new revenue.

Periodically, school districts decline to levy millage to which they were otherwise entitled for various reasons, e.g. wanting to dovetail new bond millage with old bond millage going off, not wanting to levy Ohio Facilities Construction Commission (OFCC) maintenance millage until OFCC funding is available, etc. Usually, this is done on a year-by-year basis to keep discretion with the school district. Put another way, it’s not a voted give-back and is revisited annually.

The process is straightforward when choosing to decline to levy millage otherwise entitled to levy. The board of education passes a resolution in accordance with RC 5705.31/5705.32 directing the Budget Commission not to collect certain millage by amount and type. Any reduction in taxes is done at the county level and reflected in the next tax bills going out.

The hard part is the analysis–determining the millage to forgo commensurate with the increased revenue anticipated. Additionally, school districts have to levy 20 operating mills per RC 319.301 and to qualify for the foundation program (state aid) under RC Chapter 3317.