House Bill No. 920 was enacted in 1976 as a real property tax anti-inflationary measure. Prior to its enactment, real estate property taxes increased in tandem with the increase in assessed values that occurred every three (update) or six (reappraisal) years. Consequently, if a property value increased by 20%, the tax bill for that property also increased by 20%. The bill contains a tax reduction factor designed to prevent revenues from voted tax levies from increasing even though the assessed valuation of property may rise. In other words, when property owners vote for a levy, they are voting for a continuous frozen dollar amount rather than for a set number of mills that continually increases taxes as the value of property appreciates over time.

Unlike other governmental taxing authorities that have built-in inflationary increases in tax revenues (e.g. as personal income rises, so does the level of income tax collected, or in the case where a taxing authority has inside or charter millage which is not subject to the reduction factors of House Bill No. 920), the local property tax revenue received by the Shaker Heights City School District (District) has remained relatively flat, while the costs of providing an education have risen. Therefore, as a direct result of House Bill No. 920, the District must submit a ballot issue to its residents to request additional revenue to cover the increasing cost of educating our children.

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