While Missouri legislative leaders are touting the effects of new property tax legislation sponsored this year by Senate Majority Leader Mike Gibbons that will force local taxing entities to roll back more of their property taxes, a secondary effect will be a significant reduction in near-automatic increases of local money for school districts.
“The days of taxpayers getting hit with tax increases because of reassessment are over,” Gibbons said in a press release from his office after his legislation, Senate Bill 711, was signed by Gov. Matt Blunt last week.
While the property tax rates are set by voters, what’s happened until recently has been that taxing entities received large amounts of increased revenue when county assessors conducted a reassessment that showed an increase in property values. A 20 percent increase in the value of a home during a reassessment year would often generate a corresponding increase in revenue for taxing entities. While many different types of government agencies receive property taxes, in Missouri, school districts are usually the largest recipient of property tax revenues.
Voters in each Missouri school district set their own property tax rates, but they have to follow state guidelines. A minimum property tax rate of $2.75 per $100 of assessed valuation is required of all school districts, and districts receive a penalty in state aid unless they levy at least a $3.43 property tax rate.
No school district based in Pulaski County actually levies that high of a rate except the small Gasconade C-4 School District in Laclede County that includes part of southwest Pulaski County and has only an elementary school. Gasconade students attend either Plato or Lebanon after their eighth-grade graduation.
Both area legislators, State Rep. David Day, R-Dixon, and State Sen. Frank Barnitz, D-Lake Spring, supported Senate Bill 711. However, both agreed that it raises questions for the future of Missouri education.
Barnitz, who previously served as a school board member of his own Dent-Phelps R-III School District, said he understands the effect Senate Bill 711 will have on school districts, especially those in major urban areas but also some rural areas.
“The way that the tax system is set up with property taxes is that any increases in assessment are supposed to be rolled back so the individual doesn’t see any increases in their tax values,” Barnitz said. “What was occurring, though, was because of a loophole in the law, they weren’t rolling those dollars back, therefore seeing the gains between what the tax levy was and the reassessment value of what that was, to the point of up to 30 or 35 percent increases.”
School district financing patterns vary from district to district, and Waynesville is virtually unique in Missouri by having large amounts of federal funds obtained through the impact aid program supporting school districts with large numbers of military dependents. In general, however, Barnitz said most Missouri school districts have about half of their funding coming from local sources approved by voters and the remainder from state and other non-local funding.
The state percentage of aid may increase, Barnitz said.
“I do think the state should step in and fund education at a higher level than where we are today,” Barnitz said. “Right now we are (number) 47 in the 50 states in our funding for education, and that’s ridiculous. We should, as a state, recognize that education is the baseline and we need to improve on that.”
Providing state funding is a better system because it’s a fairer system of supporting education than local property taxes, Barnitz said.
“I think that we will see funding improve to public education through our general revenue dollars, through our taxpayer dollars, and not necessarily see it only through property tax values,” Barnitz said. “Property owners today are being burdened with the entire amount for these schools and not everyone is seeing it. If you are a renter or someone who doesn't have property that you own, you’re getting a pretty good deal at the schools.”
Barnitz said he doesn’t object to an increase in local property tax revenues, as long as voters have the opportunity to approve it specifically rather than seeing schools receiving more taxes through an automatic increase based on property tax reassessments. Barnitz noted that Senate Bill 711 won’t drop school tax rates below $2.75 and voters can still choose to vote in higher property tax levies if they don’t believe the Missouri legislature is providing enough money for their school district.
“These local schools today have the right to go to the voters and get that increase as they see fit,” Barnitz said. “I think we (in the legislature) will improve for the schools, but schools can also go to the voters and show that they need an increase based on the fact that they do good management practices and roll their tax levies back.”
Day said he supported the bill but agreed that its long-term effects are unknown.
“My understanding is it doesn’t have a tremendous impact on our area; I’ll be the first to admit that the majority of that bill was done in the Senate,” Day said. “I’m not as familiar with that bill as Sen. Barnitz would be, but my understanding is it had tremendous bipartisan support in both chambers.”
Day, whose wife is a teacher in the Dixon R-I School District, acknowledged that the new legislation could, over time, result in a significant transfer of funding from local revenues to dependence on state revenue.
“Like with most things that we pass, time will be the thing that tells us,” Day said. “Whenever you look at a lot of communities throughout the state that do keep their levies very low, I think a lot of schools do depend more upon the state, so that possibility is certainly there.”
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While Missouri legislative leaders are touting the effects of new property tax legislation sponsored this year by Senate Majority Leader Mike Gibbons that will force local taxing entities to roll back more of their property taxes, a secondary effect will be a significant reduction in near-automatic increases of local money for school districts.
“The days of taxpayers getting hit with tax increases because of reassessment are over,” Gibbons said in a press release from his office after his legislation, Senate Bill 711, was signed by Gov. Matt Blunt last week.
While the property tax rates are set by voters, what’s happened until recently has been that taxing entities received large amounts of increased revenue when county assessors conducted a reassessment that showed an increase in property values. A 20 percent increase in the value of a home during a reassessment year would often generate a corresponding increase in revenue for taxing entities. While many different types of government agencies receive property taxes, in Missouri, school districts are usually the largest recipient of property tax revenues.
Voters in each Missouri school district set their own property tax rates, but they have to follow state guidelines. A minimum property tax rate of $2.75 per $100 of assessed valuation is required of all school districts, and districts receive a penalty in state aid unless they levy at least a $3.43 property tax rate.
No school district based in Pulaski County actually levies that high of a rate except the small Gasconade C-4 School District in Laclede County that includes part of southwest Pulaski County and has only an elementary school. Gasconade students attend either Plato or Lebanon after their eighth-grade graduation.
Both area legislators, State Rep. David Day, R-Dixon, and State Sen. Frank Barnitz, D-Lake Spring, supported Senate Bill 711. However, both agreed that it raises questions for the future of Missouri education.
Barnitz, who previously served as a school board member of his own Dent-Phelps R-III School District, said he understands the effect Senate Bill 711 will have on school districts, especially those in major urban areas but also some rural areas.
“The way that the tax system is set up with property taxes is that any increases in assessment are supposed to be rolled back so the individual doesn’t see any increases in their tax values,” Barnitz said. “What was occurring, though, was because of a loophole in the law, they weren’t rolling those dollars back, therefore seeing the gains between what the tax levy was and the reassessment value of what that was, to the point of up to 30 or 35 percent increases.”
School district financing patterns vary from district to district, and Waynesville is virtually unique in Missouri by having large amounts of federal funds obtained through the impact aid program supporting school districts with large numbers of military dependents. In general, however, Barnitz said most Missouri school districts have about half of their funding coming from local sources approved by voters and the remainder from state and other non-local funding.
The state percentage of aid may increase, Barnitz said.
“I do think the state should step in and fund education at a higher level than where we are today,” Barnitz said. “Right now we are (number) 47 in the 50 states in our funding for education, and that’s ridiculous. We should, as a state, recognize that education is the baseline and we need to improve on that.”
Providing state funding is a better system because it’s a fairer system of supporting education than local property taxes, Barnitz said.
“I think that we will see funding improve to public education through our general revenue dollars, through our taxpayer dollars, and not necessarily see it only through property tax values,” Barnitz said. “Property owners today are being burdened with the entire amount for these schools and not everyone is seeing it. If you are a renter or someone who doesn't have property that you own, you’re getting a pretty good deal at the schools.”
Barnitz said he doesn’t object to an increase in local property tax revenues, as long as voters have the opportunity to approve it specifically rather than seeing schools receiving more taxes through an automatic increase based on property tax reassessments. Barnitz noted that Senate Bill 711 won’t drop school tax rates below $2.75 and voters can still choose to vote in higher property tax levies if they don’t believe the Missouri legislature is providing enough money for their school district.
“These local schools today have the right to go to the voters and get that increase as they see fit,” Barnitz said. “I think we (in the legislature) will improve for the schools, but schools can also go to the voters and show that they need an increase based on the fact that they do good management practices and roll their tax levies back.”
Day said he supported the bill but agreed that its long-term effects are unknown.
“My understanding is it doesn’t have a tremendous impact on our area; I’ll be the first to admit that the majority of that bill was done in the Senate,” Day said. “I’m not as familiar with that bill as Sen. Barnitz would be, but my understanding is it had tremendous bipartisan support in both chambers.”
Day, whose wife is a teacher in the Dixon R-I School District, acknowledged that the new legislation could, over time, result in a significant transfer of funding from local revenues to dependence on state revenue.
“Like with most things that we pass, time will be the thing that tells us,” Day said. “Whenever you look at a lot of communities throughout the state that do keep their levies very low, I think a lot of schools do depend more upon the state, so that possibility is certainly there.”
