In Support of Funding for the Land Bank

By Karl Keith, Montgomery County Auditor

I recently joined Montgomery County Treasurer Carolyn Rice and several others at a meeting of the County Commission to voice our support for a permanent funding mechanism for the county’s Land Bank.   For my part, I focused my remarks on why providing additional resources for the land bank will be beneficial to the community from my perspective as the county’s assessor.

When the county completed its last update of property values in 2011, it resulted in an overall decline in value of about 7 percent.  Almost 160,000 residential property owners experienced some decrease in the value of their homes, more than 42% had decreases in value of 10 percent or more, and six jurisdictions – Dayton, Kettering, Washington Township, Trotwood, Harrison Township and Huber Heights – had declines in value of more than $100 million.  Overall, Montgomery County lost $2 billion in property value.

Those were historic numbers with far-reaching consequences.  Due to this loss in value, property tax revenues for the various schools and political subdivisions in the county fell by almost $23 million in 2012.  This includes a $2.1 million loss to Sinclair Community College, a $1.2 million loss to the county’s Metro Parks, and a staggering $8.8 million loss to the county’s Human Services levies. 

Since the update in 2011, the housing market has begun to show some signs of improvement, but these signs can be deceiving.  The number of valid real estate sales has risen significantly.  The total number of valid sales in Montgomery County for 2012 was 3,990 compared to 1,984 in 2011.  The number of fourth quarter sales in 2012 increased 175 percent over the first quarter of 2011.  However, much of the increase in the volume of sales is limited to just a small number of neighborhoods.

In fact, more than half of the neighborhoods in the city of Dayton had no sales at all in 2012.  And, thirty-four percent of Dayton’s sales were limited to just five neighborhoods. 

In the five neighborhoods where the greatest number of abandoned properties has been identified, there were only 17 sales, about 3% of the total for the year.  Further, it is significant to note that these same five neighborhoods with the greatest number of abandoned properties experienced a decline in property values between 27 and 30 percent after the county’s 2011 update.  Clearly, the negative impact of abandoned properties on the real estate market and on property values has been and continues to be dramatic.

The Auditor’s Office is currently working on the next update of real estate values, and as we look ahead to the 2014 Revaluation, my office expects values to continue to decline yet again.  Based upon our preliminary projections, property values could decrease another six percent countywide.  This will result in further revenue losses to entities throughout the county, including an additional annual loss to the county’s Human Services levies of an estimated $5.2 million.

There are a number of factors that are causing property values to decline, and the county’s Land Bank will not be able to address all of these factors.  But providing additional resources to address the affect of blight in our neighborhoods will have a positive impact on property values over time and will help to stabilize the county’s tax base.  An ongoing source of funding for the county’s Land Bank will provide valuable resources to combat property abandonment in our neighborhoods to the benefit of the entire community.

Everyone Wins with Early Voting

By Karl Keith, Montgomery County Auditor

The dispute over early voting hours – the court battles, the firing of two members of the Montgomery County Board of Elections, the media firestorm – has left me scratching my head.  How did the notion of providing citizens with additional opportunities to participate in our democracy ever become so controversial?

With just over a week to go before Election Day, it was reported that hundreds of thousands of Ohioans had taken advantage of early voting to cast their ballots.  This includes more than sixteen thousand MontgomeryCounty residents who had made the trip to the CountyAdministrationBuilding in downtown Dayton to vote in-person.  Clearly this is a popular method of voting for a large number of people.

At a time when officials grumble about voter apathy and low voter turnout, we should be jumping up and down to see so many people making this effort to exercise their right to vote.  If early, in-person voting works for such a large number of voters, if it provides greater access or even if it is just a welcome convenience, it should be embraced by everyone who wants to see our democracy flourish.

Montgomery County Treasurer Sarah Harris, one of my former employers, was all about improving customer service in county government.  “Making government serve you better,” was a theme Dr. Harris promoted during our days in the Treasurer’s Office, and she employed that theme to introduce a number of changes designed to make the Treasurer’s Office more customer-friendly.

We developed new flexible payment plans for real estate taxes and increased the office’s regular business hours.  During tax collection periods, the office was opened for extended hours and on the Saturday before the due date, a practice that continues today.  Even though property owners are given approximately three weeks to pay their tax bills, and the majority of taxpayers pay their bills by mail, weekend and late office hours are offered to make the office more accessible.  Opening the office to taxpayers on a Saturday provides another payment option, an added convenience, and an effort to provide better customer service.

This is how weekend and evening early voting hours should be viewed, making government more accessible through better service.  How anyone could oppose such a concept is hard to understand.

Some opponents of weekend and evening in-person voting argue that it is unfair, that it favors one group of voters over another.  If that is true, then the opposite must be true as well.  If we do not allow weekend and evening hours we must be granting another group of voters an unfair advantage.

I understand the partisan implications of this issue, but this really should not be a partisan issue at all.  In a nation founded on the principle that people could and should govern themselves, this should be about providing opportunities for everyone to participate regardless of their affiliation or who they are most likely to support.

MontgomeryCounty actually has a long standing tradition of allowing weekend voting.  For as long as local election officials can remember, people have been permitted to vote on the Saturday before an election while the Board of Elections was open for the distribution of polling place supplies to precinct officials.  To reverse this practice now and to deny voters this opportunity is just wrong. 

In an address to the nation during the 1963 civil rights debate, President John Kennedy proclaimed, “The rights of every man are diminished when the rights of one man are threatened.”  The strength of America depends on its commitment to expanding opportunity and providing its citizens with equal access to all the institutions of government.  When we take steps to encourage more participation in our democratic process, like we do with early voting, everyone wins.

November 2, 2012

Courage Needed in Abandoned Property Battle

By Karl Keith

Winston Churchill once observed, “It is the courage to continue that counts.”

During a recent trip to New Orleans, I discovered some amazing people who clearly possess this courage to continue.

The City of New Orleans remains scarred from the effects of Hurricane Katrina.  The storm and the floodwaters that followed left thousands of homes and buildings destroyed or severely damaged and abandoned.  On a tour of the city, I visited and spoke with several individuals who are courageously fighting to remain in their homes and reclaim their neighborhoods.

I met families who had acquired vacant lots next to their properties and planted vegetable gardens.  A couple of the homeowners had converted once empty tracts into elaborate outdoor living spaces.

Then there was this remarkable elderly couple who not only returned to their home after the storm but, also, encouraged their grandson and his young family to acquire the abandoned house next door.  The grandson, a New Orleans police officer, took a break from the work he was doing inside to show off the new backyard patio he had installed to his grandmother’s obvious delight.

During the past five years, more than 1,000New Orleans homeowners have acquired vacant lots through that city’s “Lot Next Door” program.  Similar to the City of Dayton’s “Lot Links” program, assistance is provided to encourage owners of neighboring lots to purchase these blighted and abandoned properties and return them to productive use.

The degree of devastation may not compare to the aftermath of Hurricane Katrina, but the pain and anguish associated with abandoned property is just as crippling in many neighborhoods throughout MontgomeryCounty.  My office has classified more than 6,000 properties as abandoned, meaning they have been tax delinquent for two years or longer, the water service has been turned off, and they have been slapped with a nuisance assessment to cover the cost of boarding up broken windows and doors, mowing grass or removing trash.

These properties represent the worst examples of how the housing crisis has tarnished this area while the total number of vacant housing units in the region is estimated to be around 30,000.  The homeowners living in the neighborhoods where these vacant structures are located are forced to contend with the eyesores and the various health and safety hazards that accompany these structures – not to mention the subsequent drain on their property values.

Officials are attempting to address this dilemma, but their efforts are proving to be slow, tedious and costly.  More and more jurisdictions are beginning to take advantage of the expedited foreclosure process that allows the acquisition of abandoned properties in a matter of months rather than years so that they may be redeveloped sooner. Dayton and West Carrollton have filed a number of cases using this approach, and Trotwood, Miamisburg and Harrison Township are expected to file cases later this year.

Dayton has become more aggressive in its blight removal efforts through demolition, razing more than 300 vacant structures in 2011.

And, the Montgomery County Land Bank has applied for a $4 million grant available through the Ohio Attorney General’s office to fund additional demolition.  Thirteen jurisdictions, including Dayton, Kettering,  Trotwood, Jefferson Township, Harrison Township, Butler Township, Riverside and Moraine, have agreed to kick in an additional $3 million dollars toward this effort, a real example of regional collaboration to tackle a county-wide concern. 

Still, given the extent of the problem, additional resources and commitments are needed.  To battle the widespread blight and abandonment that plagues our county, officials will be forced to make some difficult decisions.  Resources are scarce and the competing demands on these resources are great.

In The Chamber of Secrets, Professor Dumbledore told Harry Potter, “It’s our choices, Harry, that show what we truly are.”

Tough choices are required to find and direct the dollars needed to do what must be done in the abandoned property fight.  It will take courage and vision.  But, the choices we make now to address this problem will define Montgomery Countyand express what we truly are for generations to come.

 7/10/2012

Farewell and Best Wishes to Debbie Feldman

By Karl Keith

Montgomery County bid County Administrator Debbie Feldman farewell last week as she left for her new position as CEO of Children’s Medical Center in Dayton.  

Debbie and I have been friends and colleagues for more than 30 years.  When I started working for the Montgomery County Treasurer in the early 1980’s, Debbie and former county budget director Tom Black were probably the first people I came to know outside the treasurer’s office.  It has been my pleasure to watch her advance through the ranks of county government over the past three decades.  

At a reception in her honor last week, it was clear to everyone in attendance that Feldman’s contributions as a leader in the community during her career with the county were deeply felt and far-reaching.  No doubt about it, Children’s Medical Center has selected an outstanding administrator, one who possesses superior management, financial and leadership skills. 

Several years ago, an ABC News poll asked the following question:  “If you had the chance to be President of the United Statesfor one day or spend a week in jail, which option would you prefer?”  The overwhelming majority responded that they would rather spend a week in jail than be President for a single day.

Spending 30 years in public service is not something most people would desire.  Public servants are frequently criticized and ridiculed and not always held in very high regard.  But, Debbie Feldman made public service look good. 

Throughout her career, Debbie played a major role in taking the spider web of county government and weaving it into a well-managed, high performing organization.  That is not an easy thing to do within an organization where no one person is really in charge and where there are so many competing priorities. 

I was walking through the lower level of the Ohio Statehouse in Columbus a couple of months ago and saw a display with this quote from George Washington Williams, the first African-American to serve in the Ohio House of Representatives:

“Let Ohio speak for human rights, for universal suffrage, for fair and honest elections, for economy and purity in public affairs, for honest money and stable government.”

Debbie Feldman embodies those principles as much as anyone I have ever known.  I consider myself fortunate to have had the opportunity to work with her for so many years, and I am proud to call her my friend.

I wish her nothing but success in her new career and in all her future endeavors.

Chief Inspector Earns National Recognition

By Karl Keith
The first week in March is recognized annually as National Weights and Measures Week. It serves as a reminder that fairness and equity in the marketplace exist in large part due to the efforts of inspectors who work behind the scenes to enforce uniform standards of measurement.

Most of us usually take it for granted when we shop, but determining the accurate weight or volume of an object for sale is fundamental to a sound and healthy marketplace.

Montgomery County employs three full-time weights and measures inspectors with a combined total of 53 years of experience. These inspectors are the invisible third-party to each commercial transaction that takes place between buyers and sellers everyday.

In 2011, our inspectors tested and certified the accuracy of more than 1,800 scales and 5,300 gas pumps, drawing samples that totaled over 26,500 gallons of gas. Additionally, they conducted pricing verification tests at 472 retailers, verifying prices on more than 30,000 individual items.

Recently, our chief inspector, Vicky Dempsey, was awarded the prestigious Contributions Award by the National Conference on Weights and Measures. This award is given to individuals who have made notable contributions to weights and measures standards and policy both locally and nationally.

Vicky served on the NCWM Laws and Regulations Committee from 2002 through 2008, chairing the committee twice. Additionally, she was chair of the Central Weights and Measures Association in 2005 and has served as their secretary/treasurer since 2006.

Montgomery County’s chief inspector for more than 19 years, Vicky Dempsey’s leadership and expertise enables our weights and measures program to keep pace with innovations in technology and marketing practices. We are proud of her achievements.

New Dog License Measure to Address Overpopulation

By Karl Keith,  Montgomery County  Auditor

The consequences associated with pet overpopulation have been described by animal rescue groups as a national tragedy.  Indeed, the statistics are heart-rending.

An estimated 50,000 puppies and kittens are born daily in theUnited States, more than 18 million a year.  For every dog and cat with a home, there are four others that are likely to be homeless, neglected and abused. 

The number of stray dogs and cats living out on the streets inAmericatoday cannot be accurately determined, but the ASPCA estimates the number of cats alone could be as high as 70 million.

And, between 4 and 6 million dogs and cats are put down each year because no one wants them; that’s about one animal destroyed every eight seconds.

Pet overpopulation is a very real problem with dreadful results.

Encouraging pet owners to spay or neuter their pets is more than just a catch-phrase for some game show host.  It is considered to be the easiest and most effective solution to the overpopulation problem.

MontgomeryCounty’s decision to implement a fee differential this year for licensing dogs that have been spayed or neutered is a constructive measure to address this problem in our own community.  In fact, one official at the county’sAnimalResourceCenterdescribed it as the most pro-active step we have ever taken to deal with local animal control issues.

With the implementation of this fee differential, owners whose dogs have been spayed or neutered will continue to pay the $20 annual licensing fee as they have in the past, but owners whose dogs have not been altered will pay $24 per license.

There are exceptions to the additional fee for unaltered dogs.  If the owner’s dog is under 9 months of age or too advanced in age to be spayed or neutered, it can be excluded from the higher fee.  Dogs used for breeding, show, or hunting may be excluded as well.

But, encouraging owners to spay or neuter their pets whenever possible by use of a fee differential is a meaningful and progressive step with strong support throughout the community.  In an online survey of licensed dog owners conducted by the Auditor’s Office, over 90 percent of those who responded indicated backing for an increased fee for unaltered dogs.

TheMontgomeryCountyAnimalResourceCentershelters approximately 10,000 dogs and cats each year.  If you ask the staff at the Center, they will be quick to tell you that unaltered dogs comprise the majority of the animals impounded as well as those involved in bites and injuries.

This year’s new fee differential demonstrates the county’s desire to find a long term solution to some of these issues.  Over time, the additional fee for unaltered dogs is intended to have a positive impact on both the cost and the tragic consequences related to pet overpopulation in our community.

arguments to cut the homestead exemption are misleading and misplaced

It was the “Summer of Love.” 

That’s how we refer to the summer of 2007 in the Montgomery County Auditor’s Office.  Some 30,000 property owners in Montgomery County were enrolled in the Homestead Exemption Program that summer when eligibility was extended to any homeowner age 65 or older, regardless of income.

Today, more than 45,000 Montgomery County homeowners benefit from this tax break, reducing their annual property tax bills by an average of $560.

Despite its immense popularity, the expansion of this program has critics.  Indeed, some believe the program should be trimmed back or eliminated entirely as part of “redesigning” state government and tackling the state’s budget crisis. 

However, the arguments in support of this position are, for the most part, misleading and misplaced.

The advocates for cutting back the Homestead Exemption Program propose doing so through some sort of means-testing.  They contend that this break should only be provided to homeowners based upon their ability to pay, giving the impression that wealthy homeowners now benefit from the program.

An analysis of the recipients conveys a considerably different impression. 

If property value is any indication of a taxpayer’s ability to pay, then the overwhelming majority of homeowners on the Homestead Exemption Program in Montgomery County appear to be of low to moderate means. 

More than 75 percent of the current recipients own homes valued at $150,000 or less.  Approximately 65 percent own homes valued at $125,000 or less. 

Additionally, more than 4,200 recipients — almost 10 percent of those enrolled in the program in Montgomery County — are permanently and totally disabled.  And fewer than 10 percent own homes valued at more than $200,000.

The recipients of the Homestead Exemption are predominately senior citizens of moderate means, living on fixed incomes, many drawing Social Security benefits (with no cost-of-living increase for the past two years), and in all likelihood struggling to maintain their quality of life.  They simply cannot afford a huge jump in their annual property tax bills.

Furthermore, the manner in which this tax break is calculated and applied already has an “ability to pay” mechanism built in. 

The amount of the annual tax reduction is determined by exempting from taxation the first $25,000 of the homeowner’s property value.  This works to apply a cap on the amount of the credit reducing the tax burden for those with lower property values by a higher percentage than those with higher values.

For example, the owner of a $65,000 home in the City of Kettering receives an annual reduction in his or her property tax bill of $580.  That amount represents a 37 percent reduction in that homeowner’s total bill. 

The owner of a $350,000 home receives the same $580 credit, which amounts to only a 7 percent reduction in his or her tax bill.  The cap provides a progressive feature to the program.

When the legislature voted to phase-in a 21 percent across-the-board state income tax cut in 2005, where were the advocates for means testing when that tax break was being considered?

Now there is talk of eventually getting rid of Ohio’s income tax altogether, and legislation has been introduced to eliminate the estate tax.  The ability to pay principle would be better applied to deliberations about these tax reduction proposals rather than the Homestead Exemption.

The summer of 2007 may have seemed like the Summer of Love for many Ohioans, but if the Homestead Exemption Program is slashed in the next state budget — forcing senior and disabled homeowners to shoulder more of the local tax burden — this year will likely be remembered as the “Summer of Discontent.”

Don’t Put a Lot of Weight in this “Study”

During this year’s campaign, my opponent has frequently referred to a study analyzing the results of the county’s last reappraisal.  He claims this study indicates that the Montgomery County Auditor’s Office performed poorly when compared to other counties and that our results were not in compliance with professional standards.

Only recently has my opponent made available the data used to perform his analysis, and it is clear now why he was reluctant to share this information.  This so-called “study” is riddled with bad data.  Many of the property sales comparisons used in my opponent’s review are incomplete, inaccurate and invalid.  For example:

• Some of the sales involved multiple properties but his analysis included only one.
• Some of the properties have had their taxes abated by their local jurisdictions but the study failed to identify the abated value.
• And, some of the properties had been in foreclosure or had been purchased and sold multiple times in a single year.

It’s no wonder that a professor from the Department of Finance at Wright State University who examined this study was quoted in the Dayton Daily News saying “I wouldn’t put a lot weight in (these) numbers.”

The truth is every county in Ohio must submit their property values to the Ohio Department of Taxation for its review and approval whenever a reappraisal or an update is performed.  The Department of Taxation would never have approved Montgomery County’s values if the results were as my opponent claims.

When the Department of Taxation performed its most recent analysis of property values set by my office they were found to be at 97% of current market values.  This conclusion is based upon an independent review using real, reliable data.  It demonstrates that values determined by my office are well in compliance with professional standards and are, in fact, at the statewide average for counties on the same reappraisal cycle.

Establishing property values for assessment purposes is a difficult and complex process.  Nevertheless, verifiable evidence clearly shows that values set by my office fairly reflect the local real estate market in Montgomery County despite my opponent’s lack of understanding and misinformation.

County’s Strong Credit Rating Saves Taxpayers Millions

I am pleased that Montgomery County has received positive ratings from two of the leading bond rating agencies.  Moody’s Investors Service has assigned an Aa1 rating to Montgomery County’s Various Purpose General Obligation Refunding Bonds.  Standard & Poor’s Ratings Services assigned its ‘AA’ long-term rating, and stable outlook, to Montgomery County.

Bond ratings measure the financial stability of an organization.  The Aa1 and AA ratings indicate safe investment with low risk of failure.  Both agencies take into consideration a wide variety of factors including the state of the local economy, the organization’s ability to pay its debt and the organization’s fiscal policies.

These accomplishments speak volumes about our commitment to exceptional financial management.  These ratings are testimonies to the hard work and effective management practices of many county employees who strive to make sound financial decisions.  Strong credit ratings also decrease the cost of servicing the county’s debt, saving taxpayers money.

I am proud to see the efforts of my staff help the county.  We received a “Making Your Tax Dollars Count” award for excellence in financial accounting and a Certificate of Achievement from the Government Finance Officers for excellent financial reporting.  It is satisfying to see those efforts pay off in the form of a strong credit rating that will save the county an estimated $3.5 million.

Moody’s stated, “We believe the county’s financial position will remain strong. Additionally, management has demonstrated a willingness to enact expenditure reductions and is committed to maintaining a balanced budget going forward.”  Standard & Poor says  “the county’s overall financial operations remain very strong.”

Keep Residential Property Tax Rollbacks

It was just a matter of time.

Sooner or later someone was bound to throw on the table a proposal to eliminate Ohio’s tax rollbacks for residential properties in response to the state’s budget crisis.

In a recent column, commentator Thomas Suddes listed the rollbacks as one of the big ticket programs that could be cut to help plug the projected $8 billion hole in Ohio’s budget.  Eliminating the rollbacks would save the state about $1 billion a year.

The rollbacks reduce real estate taxes on owner-occupied properties by a combined total of 12.5 percent and have been in place since the early 1970’s.  The state reimburses local jurisdictions from its general revenue fund for the loss in revenue due to the rollbacks.  That totals over $64 million annually to support local schools, libraries, human services, parks and a variety of other services in Montgomery County.

To propose the elimination of this tax break for homeowners would normally be considered “crazy talk.”  Indeed, Suddes suggested in his column that a governor who messed with the rollbacks would be committing political suicide.

Yet, in a report issued June 24, the Center for Community Solutions proposed a reduction in the state’s property tax relief programs through some sort of means testing, removing or reducing the rollbacks on properties with higher values.  The report estimated that a reduction of 10 to 20 percent would save the state between $320 million and $640 million “with no adverse impact on most homeowners.”

A 12.5 percent jump in their tax bill would be shocking to any homeowner.  Most would consider such an increase unacceptable.  Taxpayers would be wise not to ignore as “crazy talk” any proposal to wipe out the rollbacks.

In fact, we should have seen this coming.  Not long ago, all properties in Ohio received the benefit of a 10 percent tax rollback.  Then the state legislature, as part of its 2005 tax reform package, removed the rollback for commercial properties.

Overshadowed by other elements of the reform package, eliminating this break for commercial property owners didn’t result in any great public outcry at the time.  Some may see that as a precedent and hope that removing the rollbacks on residential property will be met with a similar response.

For some state officials, doing away with the rollbacks may be just too tempting to resist.  This is a way to save millions of dollars each year without reducing any programs or forcing any service cuts.  And, since property taxes are administered and collected at the local level, most of the wrath from angry taxpayers would probably be directed toward local officials.

Eliminating the rollbacks would certainly help deal with the state’s budget dilemma, but it would do so by dumping a greater tax burden on Ohio’s homeowners.  For the average Montgomery County homeowner, that burden would amount to about $350 per year in additional taxes.

There are other negative consequences as well.  Local jurisdictions would realize no additional revenues as a result of this tax increase, yet it would undoubtedly make it more difficult for schools and other agencies to raise more revenue in the future.  A number of local school districts are already struggling to pass tax levies without this added burden.

Further, an increase in property taxes resulting from abolishing the rollbacks would add another bruise to an already weakened housing market.   

The leaders of the special legislative commission formed to study ways to deal with the state’s budget woes have voiced their opposition to a tax hike.  They need to be reminded that any reduction in the state’s property tax rollbacks is just that – a tax hike – one that homeowners should not be expected to bear.