June 21, 2013

Jackson County Assessment Facts, Part 2

If Jackson County assessments went up at approximately the same rate as Saint Louis County assessments during the boom real estate years, what has led to the current troubles in Jackson County’s real estate valuations? Is there even a problem? Yes, there is. Huge home assessment increases this year, during a period where everyone knows real estate values are basically holding steady (or, at best, increasing slightly), is evidence of a problem. But is it a 2013 problem, or a longer-term issue?

I think it is a long-term issue, one going back to the beginning of the current assessment system in 1985. But let’s start with the most recent, completed assessment in 2011. Jackson County had a 2010 census population of 674,158; Saint Louis County’s was 998,954. But the 2011 residential valuation in Jackson County was $5,256,120,571. Saint Louis County’s was $13,437,507,980. Thus, Jackson County has 67 percent of the population of Saint Louis County but just 39 percent of the residential real estate valuation. That is strange, and I have to believe, wrong.

And it appears to have always been this way, which means either it’s correct, funny as it may be, or that it was wrong from the beginning. In 1985, the first modern Missouri reassessment, Jackson County had a residential value of $1,478,895,251. Saint Louis County had a 1985 valuation of $4,023,318,297. Jackson County then was only 37 percent of the total. (All totals from the State Tax Commission.)

The poorer areas of Kansas City are included in the Jackson County assessment in a way that the poorer areas of Saint Louis City are not included in the Saint Louis County assessment. (Saint Louis City is not in Saint Louis County, for you Kansas City-area readers.) That would explain some of the discrepancy, but not all of it.

Jackson County and Saint Louis County are the only two large counties in the state. I cannot believe that one of them has just 39 percent of the total residential value of the other. Long-term under-assessment has to be the reason.

These low assessments have not been a good thing for most county taxpayers. The low assessments would generally have been made up with higher tax rates than in Saint Louis. Indeed, the average school district tax rate in Kansas City is higher than in Saint Louis, to give just one example. The average rate is $5.84 in Jackson County vs. $4.77  in Saint Louis County. To be fair, the existence of the Special School District in Saint Louis accounts for the bulk of that difference. Another example is that the two counties themselves have almost the exact same tax rate, even though Saint Louis County has about 300,000 unincorporated residents but Jackson County has only about 20,000. Jackson County’s rate should be lower.

For people with substantial property under-assessments, this trade-off would still have them come out ahead. For people with more accurate assessments, they would have come out behind.

Accurate assessments are not important because they lead to more money for government. I don’t care about that – I don’t even want that. Accurate assessments are important because, first, that is the law, and second, an accurate assessment system leads to a more fair property tax system for everyone.

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