Business owner voices concerns to Crestwood board about commercial tax rate

Commercial tax-rate increase ‘astronomical,’ aldermen told.


While Crestwood expects to collect about the same amount of property tax revenue as last year, a business owner expressed concern to the Board of Aldermen last week about an increase in the city’s commercial tax rate.

The board voted unanimously Sept. 28 to approve the second reading of an ordinance establishing the city’s 2010 property tax rates.

The approved 2010 property tax rates, per $100 of assessed valuation, are: residential, 22.8 cents; residential-Proposition S, 20.2 cents; commercial, 40.6 cents; commercial-Prop S, 20 cents; personal property, 27.9 cents and personal property-Prop S, 20 cents.

Post-Board of Equalization assessed valuations released Sept. 17 resulted in adjustments to the residential and commercial tax rates, which were 22.9 cents and 40.4 cents, respectively, when aldermen approved the first reading of the tax rates Sept. 14.

Final BOE assessed valuations are:

• Residential, $178,023,680 — an increase of 0.06 percent from the 2009 final BOE valuation of $177,925,220.

• Commercial, $69,488,001 — a decrease of 0.4 percent from $69,792,931 in 2009.

• Personal property, $27,532,388 — a decrease of 11.6 percent from $31,142,958 in 2009.

Total 2010 assessed valuation for real estate property in the city is $275,044,069 — a 1.4-percent decrease from $278,861,109 in 2009.

Crestwood’s 2009 property tax rates, per $100 of assessed valuation, were: residential, 22.3 cents; residential Prop S, 19.8 cents; commercial, 30.1 cents; commercial Prop S, 20 cents; personal property, 27.9 cents and personal property Prop S, 20 cents. However, the city had to set its rates last year based on preliminary assessed valuations in order to meet a Sept. 1 deadline. State legislation since has been approved extending that deadline to Oct. 1.

Final 2009 BOE numbers showed a significant reduction in the city’s residential and commercial assessed valuations. Therefore, Crestwood is able this year to levy interim recoupment rates on its residential Prop S and commercial tax rates — 0.002 cents and 4.9 cents per $100 of assessed valuation, respectively — to capture revenue that was not collected in 2009. The city can roll up its property tax rates if assessed valuations decrease to collect the same amount of revenue as the previous year.

However, Scott Masering, vice president of Walnut Park Auto Body, called the roughly 10-cent increase in the commercial property tax rate over 2009 “astronomical.”

“While 10 cents does not sound like a lot, it is still a 34-percent increase … In these horrible economic times, I certainly know my sales have not gone up by 34 percent in 2010. I would be willing to bet most businesses in Crestwood would state the same,” Masering told aldermen last week during a public hearing on the tax rates. “You may just say: Pass it on to the customer. In my trade, the rate is controlled by the insurance industry. The rate is currently at $57 per hour and in my case the increase would be a $19.38 increase. I’m sure the board would like to pay $77 per hour the next time you need body work. I would love to charge that, but nobody would pay that rate.”

Masering suggested the commercial tax-rate increase is keeping businesses out of Crestwood.

“The only 34 percent I see around here is the probable 34-percent vacancy along Watson Road …,” he said. “This proposed increase is just one of the many reasons why businesses would choose not to relocate to Crestwood. I think your slogan should be: Come to Crestwood. We’ll hit you up with a 34-percent increase.”

Masering acknowledged his calculation did not include the commercial-Prop S rate, which is unchanged from 2009.

The combined 2010 commercial tax-rate, including the Prop S rate, actually is only a roughly 11-percent increase over the 2009 combined commercial tax-rate, City Administrator Jim Eckrich said.

“And that would be an increase just on the city’s share,” Eckrich said. “The majority of your property tax goes to other taxing entities, not the city.”

Mayor Roy Robinson told Masering the city was not “out to get” its business community.

“What we’re trying to do is make sure that we can provide the services that are necessary for the community …,” Robinson said. “If you think the economic times affect your business, it affects the city the same way. And when we’re not able to provide services to our constituents then we’ve got a problem, a real problem.

“We’ve cut our staff to try and keep our city going … We’re not trying to raise it on businesses because we can. We’re trying to get what … we’re eligible to take.”

Ward 3 Alderman Jerry Miguel later asked Masering, “Are you aware that Crestwood is but a small part of your county property tax? … Do you know how much of your (real estate) property tax assessed by the county, how much of that goes to Crestwood?”

Masering said, “I know obviously the largest majority of it goes to the Lindbergh School District. I’m aware of that. And this really wouldn’t be a substantial increase on the part we pay. I did the math already. It might only be a couple hundred bucks. It’s the principle of it.”