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).