County taxes affected by soft economy
Friday, July 11, 2003
As much as it would like to, it is highly unlikely that the Cape Girardeau School District will find any more tax dollars from assessment calculations made by the county assessor's office. Even though this is a reassessment year, the school district's assessed valuation didn't go up as much as district officials hoped. Some of those officials say they wonder if the figures are correct.
While every system has the potential to go awry, the assessor's office in Cape Girardeau County is one area where that is least likely to happen. Under County Assessor Jerry Reynolds and his able staff, calculations are made each year to account for growth in real estate values as the result of new construction and in personal property as the result of purchases of such taxable items as automobiles.
In addition, the county every other year goes through a complete reassessment of real estate. Adjustments are made in the assessed values of property already on the county's books. This is one of those reassessment years, as mandated by the state, and the same process is going on in every county across Missouri.
Even though it is a reassessment year, the Cape Girardeau School District conservatively -- and fairly accurately -- estimated that the overall growth in the district's assessed valuation would be only 3 percent, even though the increase has been as much as twice that much in previous reassessment years.
But everyone, including the district's financial watchdogs, knows what's happened to the national, state and local economy. This isn't the first year that the growth in assessed valuations has slowed considerably because of the general economic slowdown.
New construction is a major component of the growth in any county's tax base, but other key components are purchases of big-ticket taxable items and the value of business machinery and equipment. As the economy has soured, consumer spending and manufacturing investment have softened as well.
Look at sales-tax receipts in our area. They have been a good indicator of the effect the economy has been having on consumer spending.
And as the economy has damped demand for manufactured goods, factories and businesses have invested fewer dollars in new equipment. As a result, the assessed valuation on older equipment has decreased, and this has been a significant reason for softer increases in Cape Girardeau County's assessed valuations.
District officials certainly have an obligation to be vigilant about the major source of local revenue for public schools. But to suggest that a state audit of the county's assessment process flies in the face of the county's history of tax assessment. And the county is regularly audited by the state tax commission.
The assessment process is an evolving one, and the county assessor's office has been warning for months that increases in overall assessments, on which local tax levies are based, would be weak at best. Other taxing entities in the county say the soft reassessment figures are no surprise to them.
Like other government entities that rely on tax dollars, the school district will have to find ways to get through the coming school year with available funding. And if the current economic upturn holds up for the long term, it will be good news -- and a welcome relief -- for everyone.