June 20, 2013

Jackson County Assessment Facts, Part 1

Is Jackson County property poorly assessed? If so, is it systematically under-assessed, or just inaccurate all the way around? If many properties are under-assessed, resulting in them paying lower taxes than they should have and others paying more, how did that happen? Is it a new problem or an old one? One reasonable hypothesis is that the county did not accurately assess property at market rates during the real estate boom of the previous decade. Anyway, does the data back up that hypothesis?

Here are some interesting numbers comparing Jackson County assessments to Saint Louis County. When I began this research, I thought the reason for the current assessment controversy would point to not increasing the values as much as they could have during the real estate boom that ended in 2007. That, of course, is not automatically a bad thing, but the point here is to discuss assessment accuracy, not tax levels. The problem, remember, in Saint Louis during the 2000 – 2007 period was more about tax entities not rolling back their tax rates than assessment increases. (Aside from the awful and illegal “drive-by” assessments of 2001, which was indeed an assessment issue.)

From 2000 to 2011, Jackson County residential assessments went up 59.6 percent. Saint Louis County, which we all know was pretty aggressive in reassessment, went up 59.7 percent. But from 2000 to the peak year of 2008, Saint Louis County went up 79.1 percent; Jackson County went up less at 68.8 percent. The difference is that Jackson County assessments decreased less from 2008 to 2011 as the real estate market declined. (Remember, the decline in real estate values began in 2007 but was not reflected in Missouri assessments until 2009.) Those assessment totals are very close to standard real estate indexes for the two areas, by the way, which is strong evidence in both counties’ favor. The key takeaway is that Jackson County was almost as aggressive as Saint Louis County in increasing assessments during the boom, so why is Jackson County so under-assessed now? (If it indeed is, though I do believe the many reports of crazy under-assessment in Jackson County.)

Going back further, from 1985 to 2011, Jackson County residential assessment increased 255 percent while Saint Louis County increased 234 percent. So, if Jackson County is so under-assessed, it has not come from a lack of reassessment increases, either during the go-go years or the total period. So what is the issue, if indeed there is one? I’ll look at it another way in Part 2.

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