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Loveland’s General Fund revenue has come from Property Tax, Estate Tax, building fees, Income Tax, the Local Government Fund, Mayor’s Court, and various other sources. A combination of decreased property values and State budget cuts have caused a sharp decrease in these revenues over the last several years. The State of Ohio cut the Local Government Fund in half, eliminated the Estate Tax in 2013, and phased out the Tangible Personal Property Tax. Beginning in 2011, property tax revenues began to decrease as a result of decreasing property values. General Fund revenue sources are described in more detail below.
As the economy began to rebound in 2013, the City of Loveland experienced a 6.41% increase in net income tax revenue over 2012. Loveland residents enjoy a relatively low income tax rate when compared to our comparable cities. Our credit rates are also favorable relative to Loveland’s comparable cities. Tax Burden Overview (T-BO), January 2012 (996)
Beginning in 2011, property tax revenues began to decrease. This is largely a result of decreasing property values and the State’s elimination of the Tangible Property Tax. This trend continued into 2012 and 2013 as well.
The property millage rate varies depending on the county, school district, and township or city in which you live. The City of Loveland occupies three different counties and three different school districts. These different counties and school districts combine to create five different property tax districts with different combinations of tax rates. While the City of Loveland tax rate is uniform in all five districts, school and county tax rates vary. This causes residents in different areas of Loveland to have different tax burdens depending upon the county and school district in which they are located.
These five different City of Loveland tax districts, all of which are inside the City limits, are:1.Clermont County, Loveland Schools;2.Warren County, Loveland Schools;3.Hamilton County, Sycamore Schools;4.Warren County, Little Miami Schools;5.Hamilton County, Loveland Schools.
Because county and school tax rates vary depending on where you live inside Loveland, the respective distribution of each dollar of property tax paid varies.
As in most parts of Ohio, the largest portion of property tax is paid to school districts. Many county services are also supported through property taxes. In all five taxing districts inside the City limits, the City of Loveland receives a relatively small portion of property tax.
Because the largest single group of residents in Loveland live in Hamilton County and Loveland City Schools, we will further examine this tax district for illustrative purposes. In the Hamilton County, Loveland Schools tax district, a total of $0.14 of every dollar of property tax paid is received by the City. Of the portion of property tax received by Loveland, an even smaller fraction is put towards the General Fund.
For residents in the Hamilton County, Loveland Schools jurisdiction, only $0.056 of every dollar of property tax revenue is placed in the General Fund while $0.084 supports our fire and EMS operations. The amount of revenue generated by property tax for Loveland’s General Fund is smaller than it may initially appear.
Another substantial General Fund revenue is the Administrative Transfer ($449,773 in 2013) from other funds. Administrative transfer recognizes that the City’s water utility, for example, receives legal, administrative and financial services from staff paid for by the General Fund.
If the water utility were a wholly separate company, it would need to have these business functions either in-house or paid for through contracts. Because these functions are instead provided by staff paid for by the General Fund, the Water Fund “pays” the General Fund each year through an Administrative Transfer.
Historically, this has been done for the Water Operations, Stormwater, Sewer Billing, Sanitation & Environment, and the Fire and EMS funds. However, this transfer was eliminated for the Fire and EMS Fund in 2012, 2013, and 2014 as this fund cannot afford to pay its formulaic share. When combined, these funds now pay for about $449,773 of services from the General Fund each year. The amount transferred is based on a fixed formula.
Loveland is fortunate to have control of its own utilities (except for sewer). This enables the City’s General Fund to have a stable, more diversified revenue stream.
Mayor’s Court, Building & Zoning, Other
These three categories make up a relatively small portion of General Fund revenues. Mayor’s Court receives fees and fines as revenues while the Building & Zoning Office receives fees from building permits and inspections. Other revenues include liquor and cigarette taxes, cable franchise fees, and lease income.