Most taxing districts will face choice with 9-percent drop in assessments

Mehlville fire board will not roll up tax rate

Terry Noble

Terry Noble


With St. Louis County assessments dropping by a median 9 percent last week, most local taxing districts have a choice — roll up their tax rate through the Hancock Amendment to regain lost property-tax revenue or make cuts.

Some local taxing entities affected by last week’s reduced 2009 assessments include:

• The Lindbergh School District, which reportedly saw a 6.2-percent drop in residential valuation but a 14-percent increase in commercial valuation. Chief Financial Officer Pat Lanane said with the unexpected increase in commercial valuation, the district is projected to lose $225,000 — or less than 0.01 percent of its total assessed valuation — in property-tax revenue. Because Lindbergh’s operating tax rate is $2.75 per $100 of assessed valuation — the state minimum — it cannot roll up its tax rate to regain those funds.

• The Mehlville School District, which reportedly saw a 7.75-percent drop in residential valuation but an 18-percent increase in commercial valuation and a 100-percent increase in agricultural valuation. Superintendent Terry Noble said this will result in an overall decrease in assessed valuation of 3 percent.

• The Mehlville Fire Protection District, which reportedly saw a total drop in assessed valuation of 3.16 percent. Board of Directors Chairman Aaron Hilmer said this would result in a $433,300 drop in revenue based on tax rates set for the 2009 budget.

While both the Mehlville School District and Mehlville Fire Protection District will see total reductions of roughly 3 percent of assessed valuations, they will attack that outcome in different ways.

Noble said while the district could roll up its residential tax rate by 24 cents per $100 to regain lost revenue, the increase in assessed values of commercial properties will offset the need to roll up the residential tax rate by that full 24 cents.

“The residential (tax rate) would require a roll up. At 7.75 percent (residential assessment reduction), that’s approximately 24 cents,” Noble said. “Now, we would back out of that whatever total amount we gain from commercial and agricultural as they went up. So it probably won’t be 24 cents.

“Overall, we’re not allowed to collect more total than what we collected this year. If commercial brings in more money than that, then that’s an amount that we won’t have to draw from residential. So our residents will get a little bit of a break on their side of it because commercial went up.”

He added that in previous years when assessments have risen, the Board of Education has been required to roll back its tax rate through the Hancock Amendment to ease the burden on residential taxpayers.

This year, Noble said the district would be using “the flip side of the coin.”

“This enables a district like ours to be held harmless and maintain the amounts of local revenues that we received the previous year by rolling up our rate,” Noble said. “Our tax-rate ceiling has always been lowered per the Hancock Amendment, and we’ve rolled our levy back. As recently as 2001, our levy was as high as $3.94 for the residential taxpayer. Now it’s $3.14. If it goes up, you’ll see that all it is the Hancock Amendment working as it’s designed to work.

“We’re going to give an estimated tax levy so that we will be held harmless. It’s the flip side of the coin. We were rolling back all these years. In this case, we’ll roll up to make up for the loss. We won’t capture new revenue. We’ll only get the same amount that we got last year.”

For the Mehlville Fire Protection District, Hilmer believes the Board of Directors likely will make cuts to reflect the projected $433,300 property-tax revenue drop as opposed to rolling up its tax rate.

“If that is truly the exact number, you’re looking at something that’s roughly 2 percent of our budget,” he said. “So there’s nothing alarming from our end. And quite frankly, I’m happy to see that residents are going to get a break on their assessed valuations after the huge jump up two years ago.

“If the natural question comes of: ‘Well, what is the Mehlville fire district going to do this August when you have to set your tax rate reflecting these things?’ — if push comes to shove, there’s going to have to be some more cuts. That simply. Just like residents had to make cuts to pay their tax bills that exploded two years ago.”

Besides not rolling up its tax rate, the Mehlville fire district is asking voters in the April 7 election to decide two separate propositions to permanently reduce the district’s tax-rate ceiling.

Prop 1 asks whether the district’s general-fund tax-rate ceiling should be permanently reduced by 36 cents per $100 of assessed valuation while Prop 2 asks whether the district’s pension-fund tax-rate ceiling would be permanently reduced by 4 cents per $100. Voter approval of both propositions would save taxpayers nearly $10.5 million per year, according to Hilmer.

Seventh District County Councilman Greg Quinn, R-Ballwin, is pleased that districts will have to consider tax-rate roll-ups and advocates even lower assessments to force such districts to weigh true tax reductions.

“They have to do that in a public process,” Quinn said. “The people will be aware that they’re actually voting to raise those taxes. And if we don’t get a significant reduction in assessments, the jurisdictions won’t even have to raise the tax rates in a public, transparent process. So I think it’s very important that we get a significant decrease in assessed valuation so those jurisdictions that can will have to go through a very public process and be subject to criticism from the citizens in their districts.”

In Lindbergh, which cannot roll up its tax rate to recover lost tax revenue, Lanane said district officials are both pleased and perplexed with the lower assessments, which result in the district losing more than $225,000 in tax revenue.

“I was really thinking it would be more like $1 million,” Lanane said. “So it’s bad news and good news. The bad news is it went down $225,000 in tax money actually coming in. And that’s over four teachers.

“But the good news is it only went down $225,000. Although saying that in a reassessment year is like saying your two-year income now for the future is $225,000 less than it had been. That’s not really very good news because we normally get that little bump in a reassessment year that carries through the next year. Well, no bump.

“In fact, it’s a little bump in the road rather than a bump in terms of an increase.”

Lanane also fears that commercial entities will successfully appeal their average 14-percent assessment increase to the county, resulting in even bigger declines in tax revenue for Lindbergh.

“I am worried that there are going to be additional commercial entities hiring groups to get their taxes cut,” he said. “I’m worried about that. So that 14 percent might not hold up. These are numbers before anyone has appealed anything. This is just our first snapshot. But it does set the parameters. It’s not going to get any better than this from the school district’s standpoint.”