With about 6,200 students, Butler Area School District has the second-highest public school enrollment in the county.

It also has the largest number of properties for which the assessed values remain under appeal.

That leaves in the air tens of thousands of dollars the district may be unable to collect in taxes, the primary way Butler Area — and all districts in the state — funds education.

Also affected, but to a lesser extent, are the municipalities whose children attend Butler Area, chief among them Butler Township and the city of Butler.

This second of a three-part series examines how pending appeals of property tax assessments affects the budgets of the county seat's school district and surrounding municipalities, and how those impacts may affect local services such as education, police coverage and road maintenance.

Butler Area

Of the 48 properties in Butler County for which the assessed values remain under appeal, nearly half — 21 — are located in Butler Area School District. In sum, the assessed values of these properties currently sit higher than $5.25 million, generating for the school district nearly $550,000 in taxes based on the 2020 tax rate of 104.03 mills.

The five highest-valued properties are all commercial, and are split between Butler Township and the city.

Butler Lodging Inc., doing business as the Holiday Inn Express near Butler Crossing in the township, is the highest-valued property with an appealed assessment. Its assessed value of $818,750 — which equates to a market value of $9.52 million — would generate $117,000 in combined property tax for Butler Area, the county and the township.

The fair market value of a property in Butler County is calculated by multiplying the assessed value — considered the 1969 value of a property — by a common level ratio factor, established each year by a state tax board. For July 1, 2020 through June 30, 2021, that factor was 11.63 in Butler County.

Rounding out the five highest-valued properties are the Lowe's in Moraine Pointe Plaza, with a market value of $9.5 million and roughly $116,700 in generated taxes; Butler Arbors on the city's South Side, with a market value of $8.65 million and $130,130 in taxes; Eagle Printing Co. in the city, with an $7.72 million market value and a $116,000 tax bill; and the Fairfield Inn & Suites at the junction of Routes 422 and 8 in the township, with a market value of $6.84 million and generating $84,000 in tax revenue.

Eagle Printing Co. is the parent company of the Butler Eagle.

The Fairfield's assessment was appealed under its old ownership before being foreclosed on in December and subsequently auctioned off in May, and it currently remains under escrow.

The Eagle was only able to obtain the appellant's independent assessment for a few properties: Peoples United Telephone Co. in the city with an assessed value of $55,000 and the Fairfield.

For the Fairfield, the property owner's assessor argued it should be appraised at $215,821 — slightly more than one-third its current assessed value. If that assessment were accepted, the three local government bodies would see a $53,000 cut to their tax revenues, with Butler Area bearing a $38,700 decrease.

Data obtained from the county shows the Peoples United assessment is just a $10 difference, which would result in a total loss of $1.73 in revenue.

For the district, should the 21 properties settle for 75% of their current assessments, the resulting $130,000 revenue dip would be equivalent to a 3% cut in tax millage, or a roughly 2.96-mill decrease.

The city

The 10 property assessments under appeal in the city of Butler add up to a fair market value of about $27.38 million. Unlike in the township, which has an 11.25 mill tax rate, the city's revenue from those properties would total more than $100,000, given its total millage of 43.25.

Rounding out the five highest-valued properties for which the assessments are appealed in the city are Butler Arbors, Eagle Printing, two Hari Hotels LLC properties — including the Springhill Suites — totaling $8.27 million in market value and a property at 110 W. Diamond St. owned by Big Stu Coup LLC worth $732,166 on the market.

Butler Township

Although just four properties in the township remain under assessment appeal, their values are relatively high.

With the Holiday Inn Express, Lowe's, Fairfield and a homeowner appealing their property's assessed values, the total market value of these parcels amounts to more than $26 million. But given the low property tax rates, all four sites combined generate $25,200 in property tax revenue for the township.

Tom Knights, Butler Township manager, said roughly 20% of the township's revenue is generated via property tax, with earned income, local service and business privilege taxes — all of which are Act 511 taxes — generating a plurality of revenue.

“Just for comparison's sake, Act 511 taxes account for close to 50% of our budget,” Knights said, adding between a fifth and a quarter of the budget stems from property revenue. “The other 25% is pretty dispersed.”

He added that the number of unresolved tax appeals is “not uncommon” for the township during any given year, especially with the myriad commercial properties in Butler Township. Roughly 12 property owners appeal the assessment each year, he said, and around a quarter of them proceed to arbitration.

Because the township's millage is much lower than the school district's and even the county's, having such high-value assessments under appeal doesn't throw as much of a wrench in their budgeting process as it may for Butler Area or the county.

“The assessment appeal process doesn't follow the budget process, so it's always difficult to know what the impact is going to be on the current budget year, but it certainly has to be accounted for next budget year,” Knights said. “There's uncertainty until you get a decision. You take it when you get your decision and you adjust your budget accordingly.”