Eleven school districts get day in court
 One of the properties the 11 Jackson County school districts allege is undervalued. According to the lawsuit, the property, at 1100 N. Noland Rd., in Independence, was purchased for $355,000 in 2007, nearly $100,000 more than its 2008 assessed value. |
By Audrey Spalding
Show-Me Institute
On Friday, a Jackson County judge ruled that Missouri school districts, faced with lower property tax revenues, cannot sue for higher property assessments.
In the current climate of declining real estate values, the ruling is significant. For the 11 Jackson County school districts that banded together to file a lawsuit against the Jackson County assessor, the ruling means that they will face a combined revenue loss of $35 million for the 2009–2010 school year alone.
On the other hand, Jackson County residents, who have already received their 2009 assessments, won’t see an unexpected increase in their property taxes.
“Most homeowners saw their property values lowered with this year’s reassessment,” said Brian Johnson of the Jackson County Assessment Department in a written statement. “… It’s no secret property values have dropped nationwide and our county has been no exception.”
The districts’ lawsuit alleged that the Jackson County assessor has been consistently undervaluing properties over the years. According to their lawsuit, property assessments submitted for 2009 are far too low compared to nearby property sales in recent years.
For example, a property just a few miles away from the courthouse (pictured above) was listed in the districts’ lawsuit because its 2009 assessed value was 125 percent lower than the price it was purchased at in June 2008. Nearly 50 properties with assessments at least 10 percent below recent sales values were listed in the districts’ lawsuit.
“They are so far from the sales price that they cannot be justified,” said Steve Mauer, the lawyer for the districts.
What the districts wanted was for the Jackson County assessor to rescind the 2009 assessments and apply the 2008 assessments, which Mauer said are “real numbers that we know have been approved.”
Of course, the 2008 numbers reflect higher property values from a better economic time. If the districts had gotten their wish, property taxes for Jackson County residents would have gone up — for some, a significant amount.
The judge, Michael Manners, didn’t have an easy decision before him. From the plaintiffs, he had Independence School District Superintendent Jim Hinson testifying that his district would be short more than $2 million if the 2009 assessments were allowed to stand, and, because of the Hancock Amendment, would not be able to recoup the losses if property values began to increase in later years.
From the defendants, Manners had the promise of an immediate demand for the authority to issue a $54 million bond from the county assessor’s office if he granted the school district’s request, and the specter of some people in the coming year forced to pay taxes on property they had owned in 2008, but had sold by 2009.
The hearing Manners held on Thursday was simply to determine whether the 16th Circuit Court had the authority to hear the case, and whether it would issue a temporary restraining order against the county assessor. But what normally takes little time in court stretched into nearly four hours of arguments about the tax collecting process, whether schools were overspending, the overall direction of the economy, and the fairness of districts doling out raises during a severe recession.
Though Manners wrote Friday that the circuit court could hear the case, he wrote that school districts don’t have the authority to sue the assessor’s office for assessments that are too low. That authority, he wrote, was determined by a previous Missouri court case in 1975, in which the St. Francois County School District sued a county administrative board for undervaluing real estate. The district lost because, the court said, only property owners have the right to appeal an assessment.
Charlene Wright, a lawyer for the county assessor characterized the lawsuit as a money grab. “They want a $54 million tax increase,” she said during the Thursday hearing. “And they want this court to help them do that.”
“They have the ability to go back to voters,” she said. “If they want that money, they can go back to the people and ask for a vote.”
The situation that the Jackson County school districts are in is not unique. Many Missouri districts are seeing less-than-rosy property assessment values this year. For example, Saint Louis County school districts saw a 9-percent decline in commercial assessed valuation in less than six months.
Whether school districts will make that move for more funds remains to be seen. Many districts wait until April to put tax levy increase proposals up for vote, though they also have earlier ballot options, in November and February.
