My taxes are higher than your taxes

In Ohio, property (real estate) taxes are administered at the county level. The residents of the individual cities and towns vote on levies that specify the rates of taxation, but the valuation of the properties is done by the county. Further, the tax valuation of a property is based not upon the sale price, but upon the values of comparables in the neighborhood. Thus, if a house sells for considerably below neighborhood comparables, the property owner's taxes will not be reduced accordingly. The property owner can appeal the valuation and likely get a reduction, though probably not to the full amount of the difference.

Shaker Heights was developed with relatively few commercial properties. As a result, the burden of taxation falls on the homeowners. This works well enough for me - we, as the residents, are not beholden to large commercial interests and their threats to leave the municipality for another with lower taxes, the way some cities are. The residents of Shaker Heights have, over time, voted for taxes that support our schools, which are among the best in the area, and the rest of the city government. The schools get 70% of the tax revenue, the city, 10%, the county, 16%, and the library, 4%.

Our annual tax, as a percent of market value comes to a whopping 3.12%. This is the highest rate in the state of Ohio*, and probably one of the highest in the country. While these numbers may seem insane to residents of the east or west coasts, one must keep in mind that the property values are much lower here, and that the high property taxes are simply a part of the cost of buying a house here. The total cost of home ownership is still quite reasonable, I think.

In February or March, I submitted an appeal of my property valuation to the Cuyahoga County Board of Revision, the body responsible for such things. The Board accepts appeals during a three month window each year. This year, with the state of the economy, home values are down, so many more people are appealing their valuation than in the past.

I'm only asking that my valuation be adjusted to reflect the price that I paid for the house. The house was on the market for an extended period of time, and changed hands in an arm's length transaction. Further, I've included several comparable sales that the appraiser for the mortgage came up with. (How he managed to think that those houses are comparables, I do not know, but that's beside the point.) The property is currently valued at an amount that is 50% more than we paid for it. To get even half of the difference back would be significant for our budget.

The backlog at the Board of Revisions seems to stretch on forever. Of the properties in Shaker Heights that filed an appeal through the end of March, a mere 3.3% have had hearings or had them scheduled. For comparison, 41.3% of the same group have had or had hearings scheduled for appeals regarding the 2007 tax year, and 60% for the 2006 tax year. At this rate, it's going to be ages before our hearing.

* There is a small part of the city of Cleveland that falls in the Shaker Heights School District. The residents of this area pay even higher taxes, 3.20% of market value, because they pay taxes for the city of Cleveland, and also for the Shaker schools.