Tax burden for rising land values softened for some

Although property and real estate assessments have gone up 8 percent in Cape Girardeau County, that doesn't mean tax bills will follow suit.

Missouri statutes limit the amount of money any taxing jurisdiction can collect from increased real estate value, meaning most property owners likely won't have an 8 percent tax increase.

When dealing with existing taxpayers who already pay real estate taxes, districts may raise a levy up to 5 percent or the U.S. Consumer Price Index, whichever is lower, based on the county's total increased real estate valuation. Generally the CPI, at about 3 percent, is lower.

If the overall assessment growth, minus new construction and growth in personal property, is higher than the CPI, then the levy has to be rolled back so the district remains revenue neutral.

The laws are made so the taxing entities can't profit from the county's growth in real estate values. It doesn't mean, however, that everyone will see the same percentage increase on their tax bills.

While districts roll back their levies based on the overall valuation, the assessments may affect taxpayers differently.

Those whose properties increased at a rate less than the rollback will have a smaller tax increase than someone whose property value increased at a rate higher than the rollback.

New construction and personal property increases, meanwhile, are "revenue candy" to taxing jurisdictions. Districts reap the full benefits of those assessment increases and don't have to apply those figures when figuring the rollback for existing taxpayers, said Becky Webb, a tax rate supervisor for the state auditor's office.

But the new construction totals have not yet been figured by the county assessor's office. Officials don't know yet what affect the newest figures might have on tax bills because the numbers released this week by the assessor's office aren't broken down.

"Some of it is new construction and some businesses have grown more than others, so an individual tax bill may change at a much different rate," said Jim Welker, assistant superintendent of finance at Jackson public schools.

Welker said he does not anticipate any change to the district's total levy of $3.31 per $100 assessed valuation as a result of assessments this year.

Each taxing entity has the authority to set its own tax rates, up to a standard ceiling. A ceiling is determined by a specific formula established by the state auditor's office and may be different from district to district.

If districts set their tax rate lower than the statutory ceiling, they have the option of a "voluntary rollback." Districts may raise rates up to the ceiling a year later without voter approval, although the board members would likely face political scrutiny.

Any taxing district that wishes to raise the tax ceiling must do so with voter approval. Ideally, property and real estate growth allow taxing districts to keep pace with the cost of living.

Occasionally, when property and real estate values (particularly new construction) flatten out at a rate less than the CPI, taxing entities are faced with tough decisions on whether to raise the voluntary rollback.

The state's provision aims at keeping tax rates fair.

All Missouri counties are required to do property and real estate reassessments in odd-numbered years.

Staff writer Callie Clark Miller contributed to this story.

bmiller@semissourian.com

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cmiller@semissourian.com

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