County's Values Relative to Real Estate Market

Sales ratio studies conducted by this office and filed with the State Tax Commission (STC) of Missouri, on a quarterly basis, during 2009 and 2010 indicated the assessed values on the Assessor’s books were below true value in money ([fair] market value, see Note 1), or below being at 100% of what property had actually sold for, as of January 1, 2011. An assessor is able to compare their appraised value (which generally does not change for two years) for a property that has sold to the selling price of the property (see Note 2). This ratio tells an assessor what percent their appraised value is of the selling price. A ratio of one (100%) means the assessor is reflecting market value. A ratio over one means the level of appraised value exceeds the actual selling prices. A ratio less than one means the assessor is under appraising relative to the actual selling prices in the open market. Statistical studies are performed on these ratios to find measures of central tendency and measures of variability. The results of this statistical analysis (see Note 3) are listed below:

2nd Quarter 2011: 0.88, or 88%
1st Quarter 2011: 0.88, or 88%

4th Quarter 2010, for 2009 and 2010 sales: 0.92, or 92%

4th Quarter 2010: 0.92, or 92%
3rd Quarter 2010: 0.90, or 90%
2nd Quarter 2010: 0.89, or 89%
1st Quarter 2010: 0.89, or 89%

4th Quarter 2009: 0.93, or 93%
3rd Quarter 2009: 0.93, or 93%
2nd Quarter 2009: 0.95, or 95%
1st Quarter 2009: 0.96, or 96%

4th Quarter 2008: 0.90, or 90%
3rd Quarter 2008: 0.89, or 89%
2nd Quarter 2008: 0.89, or 89%
1st Quarter 2008: 0.89, or 89%

4th Quarter 2007: 0.89, or 89%
3rd Quarter 2007: 0.87, or 87%
2nd Quarter 2007: 0.88, or 88%
1st Quarter 2007: 0.89, or 89%

Notes:

Note 1: Market value is defined as:
“The most probable price which a property should bring in a competitive and
open market under all conditions requisite to a fair sale, the buyer and seller each
acting prudently and knowledgably, and assuming the price is not affected by
undue stimulus. Implicit in this definition are the consummation of a sale as of a
specified date and the passing of title from seller to buyer whereby:
1. Buyer and seller are typically motivated;
2. Both parties are well informed or well advised and acting in what they
consider their own best interests;
3. A reasonable time is allowed for exposure in the open market;
4. Payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
5. The price represents the normal consideration for the property sold unaffected
by special or creative financing or sales concessions granted by anyone
associated with the sale.”
(IAAO Standard on Ratio Studies 2007 and Title XI FIRREA 1990)

Note 2: Assessor’s in the State of Missouri follow strict rules; rules recommended by the International Association of Assessing Officers (IAAO) and by the STC, regarding the types of sales allowed in these studies. In essence these sales have to be arms-length open market sales. In general, foreclosure, auction, buyer/seller related, owner owned adjoining, to name a few types of sales, are not eligible in the assessor’s studies. In fact the STC states the following sales are generally invalid for ratio studies: sales involving government agencies and public utilities; charitable, religious, or educational institutions; financial institutions; relatives or corporate affiliates; settlements of estate; forced sales; sales of doubtful title; and sales with special conditions involving trades, partial interests, land contracts, incomplete or unbuilt common property, and auctions. The definition of a sale that Missouri assessors use is:

Note 3: The ratio from one quarter to another indicates the cumulative or aggregate ratio for all sales from the beginning of each year through the period ending indicated. In other words the ratio is a year-to-date as of the end of the quarter’s calendar date. This stabilizes changes in the market from one time period to another, showing a ‘net’ result for a year (or period ending) rather than the fluctuations from quarter to quarter.

Impact of 12-31-2010 Tornados, Severe Storms

Attention Property Owners:

If your property was impacted significantly by either the tornados, high winds, or severe storms that occurred on Friday December 31, 2010 please inform the assessor's office at your earliest convenience with the details. If you are a neighbor to someone who experienced extensive damage, please feel free to notify us on their behalf. We have spent time going through the news reports gathering information, reviewing helicopter aerial video surveillance, talking with members of the community, and will spend time canvassing the area in the upcoming weeks, but we may not fully realize the extent of damage from the outside from our vantage point and will need your help. In the meantime we are compiling a list of properties to go see as we become aware of them.

Extensive Structural Damage
Significantly impacted property would include fully destroyed or missing buildings, nearly destroyed buildings, buildings that sustained heavy damage and will require a significant cost-to-cure to make repairs, buildings that have been deemed uninhabitable (either permanently or temporarily), and buildings that require repairs extensive enough that the repair time is measured in months, exterior or interior walls that will need to be removed and replaced; in other words, extensive structural damage. These types of property may be considered to have suffered tremendous loss in value which is more or less permanent until cured (if even possible). If your or your neighbor's property sustained structural damage to any structure, please let us know as soon as possible.

Cosmetic Non-structural Damage
Properties that only require cosmetic non-structural repairs (such as some new roofing material not including roof decking or trussing, replacement of some missing siding, or replacement of a garage door panel, or replacement of some window glass for instance) where the structure itself is still intact, uncompromised, and habitable are not generally considered to have suffered a loss of value since these types of repair are made quickly and are usually considered normal wear and tear type maintenance. However, the exception to this is: if there is a significant amount of cosmetic damage to multiple components of the structure then we may need to address this in the assessment. Bringing our attention to cosmetic damage will help us ensure that no property in the path of these storms is overlooked or given due consideration.

Our Intent
It is our goal to document the damage and make appropriate adjustments as necessary on the assessor's assessment rolls for the 2011 tax year. Ad valorem tax day in Missouri is January 1 and loss of value for these properties should be reflected in the upcoming tax year. To this end, it may be helpful for us to see insurance reports, construction repair estimates, or other similar documentation of damages and the cost of damage. Damage adjustments that are made for January 1, 2011 will remain in place until January 1, 2012 when sufficient repairs are completed, or new construction has replaced demolished structures, or the buildings are again habited on a regular basis. We will review affected areas sometime around the end of 2011 to make this determination. In the meantime I would encourage property owners to be in communciation with us early in the 2011 reassessment process so the decision making can be handled in a timely and fair manner.

Thank you and my best regards to our property owners,

Kevin D. Rasmussen

Disabled POW Exemption Instructions

Recently the voters in the State of Missouri elected to exempt from taxation the real property used as a homestead of citizens of this state who are former prisoners of war and have a total service-connected disability.

To qualify, the applicant must 1) be a former prisoner of war and 2) a veteran of any branch of the armed forces of the United States or this state who became one hundred percent disabled as a result of his or her military service, and must 3) own and occupy the homestead as a primary residence.

To this end we request that applicants for said exemption provide the information requested below.

Please include the following documents with your request.

A completed “Affidavit of Ownership and Residency” (blank available in Assessor's office), or equivalent documentation demonstrating the applicant occupies the homestead as their primary residence;
AND
A letter from the United States Government or United States Department of Veterans Affairs as proof of service-connected total disability;
AND
(a) A Form DD 214 (Discharge Certificate) showing Ex-Prisoner of War Status;
OR
(b) A letter from the Military Personnel Records Center [also known as National Archives and Records Administration (NARA) or the United States Department of Veterans Affairs indicating that the applicant is a former prisoner of war.

Notice regarding the local taxes and property values, 2009

The Phelps County Collector's office recently mailed the 2009 Real Estate and Personal Property ad valorem tax (see Note 1) statements. For the first time ever, the County ran all the addresses through the USPS’s National Change of Address (NCOA) system prior to printing the statements. Property owners who did not receive their statements should contact the Collector immediately (see Note 2).

Property owners who have tax bill amounts that have changed should compare the previous year’s tax bill to the current tax bill. On it are two key pieces of information: the assessed value and the tax levy.

- The assessed value is set by the assessor. If your assessed value changed, then either the property was reassessed, new construction or missing improvements were picked up, corrections were made in the calculations, the property was split or combined, or the use or assessment subclass changed. The assessed value is used in the tax calculation (see note 3).

- The tax levy is set by the individual taxing districts, something that is done by an elected or governing board, not the assessor. For example, if your assessed value was 10,000 last year and this year, but your tax bill is higher, then this means that one or more of your taxing authorities increased their levy this past fall.

In regards to the assessed values on the Assessor’s assessment books, the 2009 reassessment generally produced very little or no change in the aggregate values (not including new construction). Reassessment in the State of Missouri occurs every two years for the odd year with the assessed values based on an appraisal date of January 1. The Assessor and his staff concentrated on data collection, data entry, new construction, and some equity issues in a few neighborhoods.

Sales ratio studies conducted by this office and filed with the State Tax Commission (STC) of Missouri, on a quarterly basis, during 2007 and 2008 indicated the assessed values on the Assessor’s books were still below true value in money, or below being at 100% of what property had actually sold for, as of January 1, 2009. An assessor is able to compare their appraised value (which generally does not change for two years) for a property that has sold to the selling price of the property (see Note 4). This ratio tells an assessor what percent their appraised value is of the selling price. A ratio of one (100%) means the assessor is reflecting true value in money. A ratio over one means the appraised value exceeds the actual selling price. A ratio less than one means the assessor is under appraising relative to the actual selling prices in the open market.

Statistical studies are performed on these ratios to find measures of central tendency and measures of variability. The results of this statistical analysis (see Note 5) are listed below:

• 1st Quarter 2007: 0.89, or 89%
  
• 2nd Quarter 2007: 0.88, or 88%
  
• 3rd Quarter 2007: 0.87, or 87%
  
• 4th Quarter 2007: 0.89, or 89%
  
• 1st Quarter 2008: 0.89, or 89%
  
• 2nd Quarter 2008: 0.89, or 89%
  
• 3rd Quarter 2008: 0.89, or 89%
  
• 4th Quarter 2008: 0.90, or 90%

Based on these results it is evident the Assessor’s appraised values were generally not reflecting true value in money as January 1, 2009 (our appraisal date by statute for 2009/2010). In other words, in general the County’s values on the books were at 90% of what property was actually selling for. This indicates to an assessor that the values on the books should have been increased by about ten percent in many of the jurisdictions. However, because of the changing markets in the early months of 2009, the Phelps County Assessor decided to leave values at their current level (with some exceptions), and address any further changes in the real estate market in the 2011 reassessment cycle.

Property owners who believe their property value dropped prior to January 1, 2009 should first consider whether or the County’s value at that time was actually undervalued or close to value, since our values were generally ten percent low.

Property owners who are concerned that property value has changed since January 1, 2009 need to be aware that the assessor’s in Missouri are closely monitoring changes in their local markets. The first opportunity assessors will have to address current (post January 1, 2009) changes in market will be the upcoming reassessement cycle, meaning the values placed on the County books as of January 1, 2011 (see Note 6).

Property owners should also consider how a decreasing real estate market could affect property taxes. If and when the aggregate assessed value changes in a district or county then the taxing authorities are required by law to adjust their tax levies in a corresponding manner. State laws ensure that taxing districts will continue to receive the same amount of ad valorem tax from year to year. In the case of a growing market, where the value of property has increased, then the districts are required to roll their levy back to offset the valuation increase. In the case of a loss of assessed value, (i.e. a declining market; real estate or personal property, or a large taxpayer removes assessed value from the County) then the districts are allowed to increase their tax levies to offset this loss (see Note 7). The increase then ensures the taxing district of receiving the same amount of money they received the previous year. The impact then, of a changing market on the ad valorem tax is more or less negated.

What does this mean to a property owner in a changing market where property values are declining? A property owner is unlikely to see little benefit from an ‘across the board’ reduction in appraised value for all owners in a reassessment year, because a taxing district can increase their levy to offset the loss in assessed value (see Note 7). In other words, if a district you live in is used to receiving ten million dollars in ad valorem tax revenue, they will continue to receive that ten million through a higher tax rate. Bottom line is, a substantially lower tax bill is very unlikely, since the increased tax levy would essentially keep the individual tax bills at the same level of dollars, thus maintaining the current local funding of a district.

Note 1: An ad valorem tax is a tax based solely on value.

Note 2: The Collector’s phone number is 573-458-6155.

Note 3: Assessment rates are set by statute and are as follows: residential is 19%, agricultural is 12%, commercial is 32%, and ‘other’ is 32%.

Note 4: Assessor’s in the State of Missouri follow strict rules; rules recommended by the International Association of Assessing Officers (IAAO) and by the STC, regarding the types of sales are allowed in these studies. In essence these sales have to be arms-length open market sales. In general, foreclosure, auction, buyer/seller related, owner owned adjoining, to name a few types of sales, are not eligible in the assessor’s studies.

Note 5: The ratio from one quarter to another indicates the cumulative or aggregate ratio for all sales from the beginning of each year through the period ending indicated. In other words the ratio is a year-to-date as of the end of the quarter’s calendar date. This stabilizes changes in the market from one time period to another, showing a ‘net’ result for a year (or period ending) rather than the fluctuations from quarter to quarter.

Note 6: The even years in Missouri are not legal reassessment years; in general, changes other than new construction and use have to wait until the following odd year.

Note 7: For example, if the total assessed value in a district is $4,000,000 and that district has typically collected $100,000 in taxes then the tax levy per hundred dollars of assessed value would be approximately $2.5000.

- If the assessor reduces the assessed value 15% in that jurisdiction (15% on each property), due to a declining real estate market, then the assessed value for that district would become $3,400,000.
- Since the jurisdiction is allowed to maintain the $100,000 revenue from the local tax base, then we would calculate the new levy as follows: $3,400,000 divided by 100 equals $34,000. Then $100,000 revenue divided by $34,000 equals $2.9412; the new tax levy required to maintain the current revenues.
- The percent change in the tax levy is $2.9412 minus $2.5000 divided by $2.5000 times 100, which is a 17.648% change.
- For a home owner in that district whose residential property was on the assessor’s roll for $19,000 assessed value ($100,000 appraised value) prior to the declining market, the tax bill would have been $475.00 ($19,000 divided 100 times $2.5000).
- During reassessment, the property value was reduced by 15% so the new appraised value is $85,000 with an assessed value of $16,150. Applying the district’s new tax levy ($2.9412) to the new assessed value ($16,150), the tax bill would be $475.00, which is unchanged from the prior year.

In fairness to taxpayers...

As Assessor, it is my desire to ensure that the real estate assessed values in this County never get as far behind as they were (in 2005-2006) as compared to what property is actually selling for.

It is my opinion that it is not fair to the property owners of Phelps County to face huge reassessment increases like the adjustments that were made in 2007.

The Assessor's job, every two years, is to adjust and equalize the County assessed values to reflect true value in money, or market value. Therefore, I believe it is more fair and understandable to the taxpayers to make these adjustments on a regular basis (every two years, as the law requires), so that the adjustments being made are truly a reflection of how the market values have actually changed in the time period being reflected.

Market value is determined by analyzing the actual sales prices of property in Phelps County. The Assessor's office analyzes what property is selling for on a quarterly basis each year in addition to a few specialized studies conducted to determine adjustment factors and indicated depreciation (based on age). By using the three appraisal approaches to value (cost, income, and market approach) in conjunction with the mass appraisal techniques promoted by the State Tax Commission and the International Association of Assessing Officers (IAAO), the Assessor is able to estimate the true value in money for the thousands of real estate properties in Phelps County.

As many of you are aware, the national news media has reported that real estate values around the nation have decreased, new housing starts are down, bankruptcy filings have increased, the median price that a house sells for is down, and the length of time to sell on the market has increased, just to mention a few reports.

With the 2009 reassessment on the horizon, I want to assure property owners that the assessors office is aware of these situations, that any changes in assessed value for 2009, if any, will be based on what property has actually been selling for in Phelps County. We will carefully analyze our local market data and only make changes as necessary.

Phelps County is fortunate in that our local real estate market is much more stable as compared to other areas of the country. Overall, so far we have not seen the dramatic fluctuations in the selling price of our homes. Yes, it is true that many of the homes are on the market for a long time prior to selling, and yes many of them have been on the market for a long time and still remain on the market, yet the selling price of a home in Phelps County has not taken the hit that other markets have around the nation. In that most Phelps County property owners are very fortunate; their real estate investments are intact.

Tax Relief Programs, Now is the time to consider!

The Property Tax Credit (PTC) forms are available from the Department of Revenue (DOR) now. For those who qualify, they should contact their tax preparer or the DOR to obtain and/or file the MO-1040P and MO-CRP PTC forms. Property owners who may not be filing income tax are still eligible to apply for the credit via alternative application forms, the MO-PTC and MO-CRP.

For those who do not qualify for the Property Tax Credit, The Homestead Preservation Credit (HPC) should be considered. The forms for this credit will not be available from the DOR until the middle of March 2008. The application period for this credit is open from April 1 to October 15.

Doolittle Rural Fire Tax Levy Hearing

The Doolittle Rural Fire Protection District will conduct its public tax levy hearing at 7pm on August 28, 2007 according to a public notice published in the RDN, at the main Fire Station in Doolittle.

Newburg School Tax Levy Hearing Scheduled

The Newburg R2 tax levy hearing is scheduled for 6pm, Tuesday, August 21, 2007 according to the notice published in the Rolla Daily News.

It appears the Newburg School Board intends to invoke Amendment 2 and not do a full roll-back for their patrons. If they elect to roll-back to the Amendment 2 levy level of $2.75 with a $0.25 debt service levy, then the Newburg R2 taxpayers will have been given the "courtesy" of a thirty-seven cent reduction in their tax levy.

Their assessed value increased 41.5% overall (including new construction and the certified CPI) while the proposed tax levy is yielding a reduction of 11.1% compared to last year.

Notices of Public Hearings, on Tax Rates for 2007

31 Rolla School, August 16 2007, 5:30pm, Administration Bldg, 500 A Forum Dr Rolla.


Rolla Fire District, August 16 2007, 7:00pm, Courthouse, 200 N Main St Rolla.


City of Rolla, August 20 2007, 6:30pm, Council Chambers, 901 N Elm St Rolla.


R1 St James School, August 16 2007, 6:30pm, Administration Offices, St James.


I have not seen a publication for Edgar Springs School or Newburg School.

However, preliminary numbers being reported from Edgar Springs indicates that the School Board/Administration there has decided to invoke Amendment 2 passed by voters which allows a school with a tax rate ceiling of less than 2.75 to not do a full roll back of their levy. Edgar's rollbacks called for around a ninety cent reduction in the tax levy to something less than 1.90, but it appears the Board members there are voluntarily going to roll it back up to 2.75 and not give their patrons a break on taxes with the reassessment. Edgar Spring school patrons may see little or no tax relief with reassessment because of this type of action on the part of their school administration and Board members.

Tax Levy Hearings Scheduled

The 31 Rolla School Board has announced they will conduct a public tax levy hearing on Thursday August 16, 2007 at 5:30 pm prior to the regularly scheduled school board meeting. They will be presenting a power point presentation and allowing time for questions from the public. For more information regarding this meeting or the school tax levies, they can be reached at (573) 458-0100.

The R1 St. James School Board has tentatively set a date of Thursday August 16, 2007 at 6:30 pm for their public tax levy hearing. For more information regarding this meeting or the school tax levies, they can be reached at (573) 265-2300.

Edgar Springs' R3 Phelps County School can be reached at (573) 435-6293.

The R2 Newburg School District can be reached at (573) 762-2211.

Citizens, who are concerned about the amount of school and other district taxes that will be applied to the assessed value of their property, should be involved in the district's tax levy hearings. These public hearings are conducted for the citizens and patrons of each district. These hearings give district patrons an opportunity to understand how a levy is arrived at and enables patrons with the ability to make a district accountable for not over-levying and gaining windfalls at the expense of the taxpayers.

Relationship of tax levies to the Assessor is explained.

Property taxes in Missouri are called ad valorem taxes. Simply put, these are taxes that are based solely on value. Since the value of property is the basis for these taxes, the State of Missouri created the position of Assessor, and has mandated that the Assessor determine the value of both real estate and personal property in their jurisdiction. Assessor’s then are responsible for maintaining and updating these values periodically as specified and mandated in state law. The Missouri State Tax Commission then oversees the Assessor’s work and makes Aassessor’s accountable for doing the job.

Assessors are often blamed for tax increases, when in fact, the assessors are only responsible for setting the value of the property. There are other numbers used in calculating tax bills that have nothing to do with an assessor and are beyond the control of the assessor. Oftentimes, tax increases are the result of district board action or the result of the voters passing higher tax levies on themselves. The process of determining taxes and a taxpayer’s final tax bill involves county offices other than the assessor, the taxing districts, and some State departments. The following discussion generally details the process of establishing property value and the seven month process leading to generating taxpayer bills.

First, the assessor estimates the market value of real and personal property using established methods of mass appraisal, value guides, and depreciation tables. The market values are then used to determine the assessed value using the assessment rate percentages in the statutes. The assessor conducts informal hearings with taxpayers regarding market value of property, finalizes these values in May of each year, and turns them over to the County, generally by May 31. Once the assessor turns these assessments over to the County, these values are no longer the assessor’s but the county’s. The assessor does not have the legal right to change these values, right or wrong, since they have become the county’s values.

Secondly, the County Clerk, after receiving the values from the Assessor, tabulates them and notifies (July 1) each taxing district of their new assessed value.

Thirdly, the County Clerk then coordinates the county Board of Equalization hearings (during July) where taxpayers are able to appeal the value that was turned over to the county by the assessor. This Board has the authority to decrease, not change, or increase an assessed value based on evidence presented. Taxpayers who are not satisfied with this Board’s action can appeal their assessment to the State Tax Commission.

Fourthly, the taxing districts calculate new tax levies using the new assessed value. This is calculated by dividing the district’s budget revenue by the district’s assessed value yielding a tax levy per dollar of assessed value. Since Missouri’s tax levies are usually expressed in terms of “dollars per hundred dollars of assessed value”, in order to express this tax in proper terms, one would need to multiply the previous result by 100.

For example, if a fire district has a revenue budget of $300,000 per year, and the assessed value of the district is 130,000,000 dollars, then the following calculations would be performed:


• Revenue Budget divided by Assessed Value = $300,000 / $130,000,000 = $0.0023076923.
  
  
• To find ‘dollars per $100 of assessed value” = $0.0023076923 * 100 = $0.2308.
  
  
• In other words, the fire district would levy a tax on its patrons of twenty-three cents per hundred dollars of assessed value.

In years where a district’s assessed value increases due to reassessment, districts are required to roll back (reduce) their levies to compensate for the increase in assessed value. This helps ensure that taxpayers are not unfairly burdened with higher taxes due to reassessment and also prevents windfalls in new revenues occurring within these districts. Clearly it is the responsibility of district administrators and board members to adjust tax levies down during times of reassessment. Districts and boards that fail to do this or voluntarily decide to roll their levies back up to a minimum amount just because they can (when they don’t have to) are putting higher taxes on their patrons. These types of actions are beyond the control of the assessor. Remember, the assessor establishes the value of property and then the districts react to this and are responsible to set fair tax levies. The assessor does not set tax levies nor do they have any control over them. The tax districts set tax levies and voters vote tax levy increases on themselves.

A prior amendment, Amendment 2, established a minimum school operating tax levy of $2.75 per $100 of assessed value. In general, school boards who calculate a tax rate ceiling less than this are allowed by law to vote to roll the levy back up to the $2.75 minimum. However, because of recent changes in the Foundation Formula used in funding schools, school boards whose tax rate ceiling is determined to be below the $2.75 minimum can now elect to set the tax rate below the $2.75 and not suffer a penalty in the amount of state funding received. Previously this was not the case if a school board voluntarily elected to be below the $2.75 mark. Knowledge of this process is important for school patrons because Phelps County already has several school districts which are at or are very near this two-seventy-five minimum. Patrons in these districts should consider encouraging their boards to not to vote to roll up if not necessary. (The tax rate ceiling is generally described as follows: Since 1980, the highest tax rate approved by voters, adjusted for reassessment)

Schools are required to publicly announce their tax levy hearing date-time. Patrons, who are interested in attending these meetings and voicing concerns regarding the district’s level of taxation, should contact their school district to find out more about these public hearings. The phone numbers were posted in a separate post for the four major districts in Phelps County.

Fifthly, after the districts have conducted their public hearings (generally in July/August) and calculated their new tax levies, these levies then are submitted to the State to be checked. The State can make corrections to the levies. The State then certifies the final levy to the districts and to the counties. Usually the counties receive these certifications around the first of October.

Sixthly, the County Clerk applies these levies to the assessed values and calculates the taxes due for each property on the tax rolls.

Seventhly, the County then turns the tax book over to the collectors (generally late in October) and charges them with collecting the taxes due on the tax rolls.

Eighthly, the collectors generate the tax bills for each property owner using the numbers on the tax rolls from the Clerk. The Collector then notifies property owners of taxes due by December 31.

Things to remember about Missouri’s ad valorem tax system:

• The assessor has the responsibility to establish the market value of property. Reassessment accomplishes this because property is adjusted to what property has been selling for and equalized to ensure fairness in the assessments.
  
  
• The assessor assesses property, not people.
  
  
• The State of Missouri has provided ad valorem tax relief for those that qualify. This is done through the State with different credits and not by the assessor.
  
  
• Taxing districts are responsible for setting levies in accordance with state law, including reducing levies during reassessment years.
  
  
• Taxing districts have the ability to pass on tax increases to their patrons which are beyond the control of the assessor.
  
  
• Taxing districts also have the ability to do the “right thing” by their patrons by not setting tax levies any higher than they have to be.
  
  
• Voters have the ability through elections to vote higher tax levies onto themselves and have done so numerous times.
  
  
• Voters also vote to extend bond issues (extending current debt) to continue financing the operations of the district, which results in tax levies not being reduced when they otherwise would have been.
  
  
• Tax levies apply to both real property and personal property.
  
  
• In years of reassessment, when real estate assessed values increase and all district tax levies are reduced, taxpayers who kept the same vehicles would see a decrease in their personal property tax bill above and beyond the normal decrease due to vehicle depreciation.
  
  
• The percentage increase in assessed value due to reassessment does not necessarily translate into the same percentage increase in a tax bill. With levy reductions due to reassessment in place, any increase in tax bill would have to be somewhat less (percentage wise).
  

An Open Letter to Property Owners, The Appeals Process

June 7, 2007

Open Letter to Phelps County Property Owners:

As the Assessor of Phelps County, it seems appropriate to ensure that property owners are familiar with the appeals process regarding their property assessments. To this end I feel it would be in every taxpayer’s interest to know about the following rights and procedures so that due process is not missed by a taxpayer in our county. Below, are discussions on 1) the appeal process now available to taxpayers, 2) tax districts and their levies, and 3) tax relief available in Missouri.

1. BOARD OF EQUALIZATION AND APPEALS

Recently reassessment was conducted in Phelps County for the tax year 2007. Real estate taxpayers were mailed a notice of increased in assessed value on April 30th. Missouri laws (RSMo 137.180 and 137.275) provide that property owners may appeal the increase or the assessment to the County Board of Equalization (BOE). BOE hearings can be heard regarding either real estate and/or personal property assessments. The County Clerk has publicized and set a deadline to file for BOE of June 15, 2007. To schedule an appointment or to make an appeal in writing, call the County Clerk at (573) 458-6115 for more information.

In general there are four reasons for filing for the BOE: valuation, discrimination, misclassification, and exemption. For valuation and discrimination appeals, the taxpayer has the burden to prove the market value as of January 1, 2007. The BOE may increase or decrease value as new evidence or information indicates.

While the County understands that many of our citizens have great difficulty paying property taxes, BOE hearings are not about making adjustments due to taxpayer hardship. The state legislature has made provision for taxpayer hardship as discussed below in “Tax Relief”. Nor are BOE appeals about negotiating a settlement. They simply concern establishing fair market value, classification, or exemption for property.

Taxpayers are not allowed to appeal a tax bill amount. Taxpayer’s rights for appeal are now, starting with the BOE appeals. Taxpayers who wait until their actual tax bills come out to decide whether their appraised value is accurate will have waived their rights to due process for their 2007 assessed value. These taxpayers would have the right to appeal their appraised value in the following year, but that appeal would only apply to that year.

Taxpayers may appear before the BOE without having had an informal hearing with the assessor’s office. Any person may appeal in person, by attorney or agent (some restrictions apply), or in writing. A hearing with the BOE is the first step in the statutory appeal process. In order to appeal to the State Tax Commission, the taxpayer MUST first appeal to the BOE. Two exceptions to this are: 1) taxpayers seeking exemption may go straight to Circuit Court, 2) if the taxpayer’s valuation increased or property was assessed for the first time and the taxpayer was not provided proper notice, STC rules provide that the taxpayer may appeal directly to the STC.

Taxpayer appeals to the STC should be done by September 30 or 30 days after the final action of the BOE, whichever is later. The State Tax Commission’s web site http://www.stc.mo.gov/ features resources which explain reassessment more fully. The web page http://www.stc.mo.gov/brochures.htm presents additional information regarding the appeals process which consists of the assessor’s informal hearings, the county’s board of equalization, and the State Tax Commission appeals.

2. TAX LEVIES

Missouri state law requires assessor’s in the state of Missouri to conduct reassessments every two years and if required to, to raise the county property values to reflect what property has actually been selling for. Our local tax base for the schools, cities, fire districts, ambulance districts, county, and other taxing districts are provided for by the assessor’s values. Our property tax system is an ad valorem tax, which is a tax based solely on value. As the value of property changes, whether it be real estate or personal property, the assessor is responsible for reflecting this change in value in the county assessments. In real estate reassessments where an assessor raises the assessed value above the normal growth factors allowed in the tax base, such as new construction and CPI, it is clear that these taxing districts are then responsible for rolling back or reducing the levies from their current levels to a lesser amount. This is the mechanism which protects taxpayers from having increased tax bills due to reassessment and also keeps the tax levying districts from gaining excess funds without a vote of the people in their district. Clearly then, it is the responsibility of these districts to roll their levies back to the fullest extent during reassessment. There is taxpayer concern throughout the state of Missouri, that tax districts will not roll back the fullest extent due to minimum levies that have been established throughout the years for the different types of districts. However, districts are required to calculate new levies during times of reassessment, and it then becomes the responsibility of the boards of the tax districts to roll back the full extent or to vote as a board to roll the levy back up to some level above the full roll back. Tax levies are not set by the assessor’s in this state. They are set by the appointed or elected board members representing the tax district in matters regarding that tax district. Taxpayers who are concerned about fair treatment with tax levies should be corresponding with the appropriate boards or perhaps even attending each district’s public tax levy hearings this summer to ensure fair treatment.

3. TAX RELIEF

In general, tax relief is intended for qualified senior citizens or 100% disabled individuals. Tax relief is available for those who qualify through, first, the Property Tax Credit (commonly known as the Circuitbreaker) and secondly, the Homestead Preservation Credit (HPC). Citizens who are eligible for the Property Tax Credit (PTC) should apply for this credit and not the Homestead credit. Citizens not eligible for the PTC will likely qualify for the HPC and should apply for it the year following a tax bill increase. In 2007, the property owners in the St. James School district that did not qualify for the PTC should now be applying for the Homestead credit. They have until October 15th of2007 to do so. Application for these credits is done through the Missouri Department of Revenue (DOR) in Jefferson City. The following DOR web pages, http://www.dor.mo.gov/tax/personal/ptc/ and http://www.dor.mo.gov/tax/personal/homestead/ have more information or you can call the DOR at (573) 751-3505 for more information. Copies of the eligibility requirements are also available in the assessor’s office.

Respectfully,

Kevin D. Rasmussen
Assessor, Phelps County

News Coverage of the Reassessment

Laura Ginsberg, writer for The Rolla Daily News recently wrote an article about the reassessment being conducted in Phelps County. It was published on February 28, 2007.

Reassessment in Phelps County is necessary because the assessed values put on the tax rolls in recent years have not performed very well in reflecting true value in money, or market value. By the end of 2006, the residential values put on the books for January 1, 2005 were only at sixty percent (on average) of what property was actually selling for. Since the assessor's values are required to reflect true value in money, a sales ratio study should show that values are closer to one hundred percent of selling price. Reassessment, the equalization of property values and adjustment of values to reflect market value, has to be done in order for the 2007 values to be in compliance with State law and mandates.

In addition to poor sales ratio performance, the values put on the books for January 1, 2005 also did not meet State standards in regards to level of assessment. The State Tax Commission (STC) conducts ratio studies to determine whether an assessor's values reflect true value in money. Appraisals are done by the STC on randomly selected properties. These appraisals are usually based on property sales of similar properties to the selected property. The ratio study calculates an assessed value for the property sample based on the appraisal and then compares this result with the assessor's assessed value. The levels of assessment in Missouri are 19% for residential, 32% for commercial, and 12% for agricultural. In 2006 the STC conducted ratio studies on both residential and commercial properties in Phelps County. This study looked at the January 1, 2005 assessor values. The STC found that the commercial properties were actually only on the books for 24.21% of true value in money, instead of the required 32% level. The January 1, 2005 residential property values were determined to be on the books for only 15.08% of true value in money, instead of the required 19% level. These levels of assessment are significantly less than the statutorily required levels of assessment, and as a result the STC issued a compliance order in September 2006 for Phelps County to bring the assessed values into compliance with state law.

The assessor's in the state of Missouri are required by law to conduct a reassessment of real property every two years, for the odd-numbered year. The reassessment conducted in 2005 was minimal at best. The problem of low property values in Phelps County was several years in the making. Not raising the property values to be in compliance with state statutes is no longer an option. It was not dealt with in recent years and now it is time for the assessor's office to face the facts and to deal with the situation.

Reassessment in Phelps County for 2007

Notice to Real Estate Property Owners:

The intent of this posting is to inform property owners regarding the real estate property value reassessment being conducted in Phelps County. The purpose of reassessment in Missouri is “…to equalize values among taxpayers and to adjust the values to reflect current market conditions.”(1) The Assessor’s staff has been reviewing properties for value since late summer 2006.

The constitution of Missouri requires assessors in the State of Missouri to reassess, or revalue, all property every two years on the odd-numbered years. Assessors are also required to place property values on the tax assessment rolls at the percent of its true value in money as set in subsection 5 of section 137.115 of the Missouri Revised Statutes. An assessor accomplishes this when the county’s assessed values reflect fair market value. Studies conducted by the State Tax Commission (STC) have shown that the values put on the tax rolls in January 2005 did not meet the requirements of the state constitution. In fact the STC stated “These [levels of assessment] are significantly below the statutorily required levels …of market value …and falls outside accepted appraisal standards relied upon by the State Tax Commission.”(2)

In order for Phelps County to bring the levels of assessment back to the statutorily required levels as of January 1, 2007, we (the assessor’s office) are applying the appraisal methods used in mass appraisal which includes statistical analysis of sales and other market data. In addition, each property, or parcel, is reviewed for value in the field for condition, changes, and improvements. Recent assessment analysis indicates increases are substantial county-wide and will most likely bring the county’s values back to the statutorily required levels. Due to reassessment, most properties will see a large value increase as of January 1, 2007.

At the conclusion of the parcel review the Assessor’s office will send property owners, who’s property value was increased, a notice of change in assessed value as required by law. These notices, which will be sent later in April 2007, will show the property value which has been determined to accurately reflect market value for tax purposes. The mailed notice will also include instructions regarding valuation hearings as well as provide information about tax relief* which the Missouri General Assembly has made available to qualifying senior citizens or 100% disabled people.

Since tax levies are not set until September, it is not possible at this time to know the impact of the value increase in regards to property taxes. While it is the responsibility of the assessor to place accurate values on the tax rolls for 2007, it is clearly the responsibility of the schools and other political subdivisions to roll back levies to the fullest extent allowed by law to offset the valuation increase.

(1)Source: Property Reassessment and Taxation, Page 7, State Tax Commission brochure, updated February 2005.

(2)Source: Amended Compliance Order, issued by State Tax Commission to Phelps County, September 19, 2006.

*Currently Missouri offers two avenues of tax relief to qualified individuals: the Property Tax Credit (includes real estate taxes paid or personal property taxes paid on mobile homes, or rents paid to a landlord) and the Homestead Preservation Credit. For more information on these credits please visit the Department of Revenue’s web page at http://dor.mo.gov/.

Tax Relief, for those who qualify, is available.

For those who qualify, tax relief is available through the Property Tax Credit (Circuitbreaker) or through the Homestead Preservation Credit. The following web page locations,http://www.dor.mo.gov/tax/personal/ptc/ and http://www.dor.mo.gov/tax/personal/homestead/ have more information. You can also call the Missouri Department of Revenue at (573) 751-3505 for more information. Copies of the eligibility requirements are also available in the assessor’s office. In general, tax relief is intended for qualified senior citizens or 100% disabled individuals. It is important to note that even though property owners, who qualify for the property tax credit, may not be filing income tax returns, they are still able to file for the credit through different forms.

May Activity Update

By April 28, the assessor's office mailed out 2,118 notices of 'change in assessed value for real property' for the 2006 tax year. As a result of this mailing, our office received around 95 calls from property owners asking questions about the notices. These notices are mailed because Missouri law requires them to be sent. Sending them gives a property owner an opportunity to review the assessor's appraised and assessment values prior to the values being turned over to the county. Property owners, who disagree with the assessor's appraised values, have the right to conduct informal hearings with the assessor's office. If an owner is not satisfied with the result of the hearing, then by the laws of Missouri (RSMo 137.180 and 138.275) they have the right to appear before the county Board of Equalization to be heard there. Appointments to appear before this board are made by calling the Phelps County Clerk. The deadline to file for the 2006 Board of Equalization is June 16, 2006. A property owner also has the right to appeal Board of Equalization decision's with higher authorities.

On June 1, the 2006 assessed values for 20,934 real estate parcels were finalized and the values were turned over to the county. Personal property values for 15,934 accounts were also turned over to the county. We will continue to add personal property to the records as people return late forms to us. The totals will be listed in another posting. These assessment value totals will be used by the various taxing districts to establish new tax levies for 2006. A new tax levy for the Saint James Fire District will be added to the tax rolls this fall.

Also, on June 1, the new construction totals were finalized and the report turned over to the county. These totals will be posted later.

During May we completed our statistical studies and derived a new index, or multiplier for our base sqaure foot costs, to be used in the upcoming revaluations for 2007's reassessment. The new index is 2.44, an increase of nearly twenty-three percent from the previous index used in 2005's reassessment. Also, land sales were analyzed and new 2007 land values derived for Phelps County. Depreciation factors, or percent good factors, were determined for the different age categories of structures using recent sales of homes in Phelps County. These studies were filed with the State Tax Commission.

Data Collectors and Appraisers

We want to remind everyone that authorized data collection and real estate appraisal is being done in Phelps County on behalf of the Assessor's office.

Please be reminded not to open your doors if you are suspicious or unsure of a person at your door.

Call the assessor's office to verify the person associated with us, who is on your property, if you have doubts. (573) 458-6135.

Make a note of the vehicle they are driving, including the license plate number. Ask to see ID.

If asked, the assessor's personnel will leave the property, but the property owner will need to make arrangements for us to reenter the property.

Second Notices Mailed for 2006 Personal Property

There were 4,154 second notices mailed this year to tax payers that had not yet responded to the first mailing. In the first mailing, 19,321 notices were mailed and 15,167 responses were obtained, putting the response rate at 78.5%.

The second notices for business accounts (394 accounts) were mailed on Wednesday, March 29.

The remainder of the second notices (3760 accounts) were mailed on Thursday, March 30.