FINANCIAL TERMS

Average Daily Attendance (ADA) - It is an official measure used to represent the average number of students in attendance.

Average Daily Membership (ADM) - ADM is an abbreviation for the average daily membership of students. It is the official measure that Ohio uses to represent the number of students in a school district for the purpose of calculating state aid.

Assessed Valuation - The assessed valuation is the value of taxable property as determined by a governmental agency or tax assessor. Taxes are paid on the basis of a property’s assessed valuation. The assessed valuation of property in most states and localities is only a percentage of the market value of the property. In Ohio, property is assessed at 35% of the market value.  For example: if your home has a market value of $100,000, then the assessed valuation is $35,000 ($100,000 x 35% = $35,000).

Basic Aid - A basic amount of money is guaranteed by the state for the education of a pupil. The money can be used by the district for any educational purpose.

Carryover Property - Property that existed prior January 1st of the previous tax year.

Charge-Off - State aid to school districts is based on and governed by required locally-levied taxes. This is the minimum amount of local tax support that a district needs to participate in the foundation program.

Class I - Residential and Agricultural real estate property.

Class II - All other real estate property not included in Class I. This would include Commercial and Industrial.

Effective Millage - A tax rate applied to real property after adjustments have been applied which reflect a tax reduction factor.

Fiscal Year - A 12 month period with a starting date selected by the state and used as the period to be covered by  the budget is called a fiscal year.  In Ohio, the fiscal year starts on July 1 and runs through June 30.

Foundation - Foundation program refers to a financial system that typically guarantees a certain foundation level of expenditures of basic aid for each student together with a minimum tax rate that each school district must levy for education purposes. The difference between what a local school district raises at the minimum tax rate and the foundation expenditure level is made up in state aid.

House Bill 920 - House Bill 920 limited the revenue from voted millage to the amount that the initial levy was to yield on all real property.

Inside Millage - Ten mills of property tax may be levied by local governments without the vote of the people. A school district is allocated a portion of the 10 non-voted mills by the county budget commission.

Market Value (Real Value) - Real value is the value of property if it were sold “at arm’s length” for assessment purposes, the price or cost which the property would command in the open market in its present geographical location.

Mill - A mill is the basic unit for computing local property taxes and is equivalent to one tenth of a cent ($0.001).

Outside (Voted) Millage - Outside mills are additional mills, above the inside millage.  These mills must be approved by the voters of a political subdivision.

Real Property Tax - The tax levied against land and buildings within a school district.

Reappraisal - Reappraisal is the process by which all real property is valued for tax purposes. Reappraisal occurs every six years.

Tangible Personal Property Tax - This is a tax levied on furniture and fixtures, equipment, supplies, inventory, and machines used in a business and industry. It is not adjusted by the tax reduction factor.

Tax Levy - A levy is an issue placed on the ballot which seeks voter approval for a specified amount of revenue to be raised by a particular millage rate. Such a levy may be used for a specified project; however, more commonly the revenue is used for the general operation of the school district.

Triennial Update - Triennial update is the process by which all real property is updated in value for tax purposes. Triennial Update occurs every three years after Reappraisal.

Source: Ohio School Finance, Richard E. Maxwell, Dale Baughman, Donald E. Overly

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