The St. Louis Post-Dispatch has a story today, via Combest, on St. Louis County’s newly born property tax reform group, and the Haenni family, which has gotten involved with it. Property owners throughout Missouri will be receiving their tax bills in the mail in the next few days. Many people, like my family, just get their personal property bills while the big one goes to the mortgage company, but enough people get them both that I predict major difficulties for any tax increase proposals on the November ballot.

The main problem the Haenni family sees is the large fund reserve balance kept by their school district, Kirkwood. (I know it seems this blog has been all Kirkwood lately, but that’s just a coincidence.) A national expert on education financing has this to say about Kirkwood’s large reserve balance of about 33 percent:

A national school budget expert questioned the need for any district to have fund balances of millions of dollars at the time tax revenue comes in.

Nationwide, the rule of thumb is five, possibly 10 percent at the most, at any time in a district fund balance," said James W. Guthrie, a professor of public policy and education at Vanderbilt University. He is president of the American Education Finance Association.

"Having fund balances that don’t dip below double-digit percentages (of the operating budget) is stunning and inexcusable," Guthrie said.

The interest alone from that balance can be very attractive to districts, he said.

"But I think it’s fair for the taxpayers to say that they’d rather some of that balance pay for a new park, or better ambulance service.

"Or, of course, to be returned to them in the form of a tax cut."

The new property tax group in St. Louis County is terrific. I am not opposed to property taxes, however. In fact, I much prefer them to income taxes — but the assessment system in Missouri needs to be reformed. I will have an op-ed with my ideas flushed out shortly.

In essence, I believe a property assessment should be set at the exact value of a sale price, and then all property within a county should be increased each year by an average amount determined by an impartial real estate value index. That would get rid of the entire reassessment system and eliminate the crazy discrepancies between neighbors we all see every reassessement year.  Also, certificates of value need to be required statewide. If some counties want to keep the sale amount private from everyone but the assessor, that’s fine, but we shouldn’t have a system where people in some counties are assessed more accurately than others.