Government & Politics

Before property assessments soared in Jackson County, state declared them too low

Assessments went way up in West Side this year. Some by 400% or more

Assessments went way up in Kansas City's West Side neighborhood this year. Some by 400 percent or more
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Assessments went way up in Kansas City's West Side neighborhood this year. Some by 400 percent or more

Extending the deadline to file appeals relieved some of the hysteria that sparked after Jackson County property owners opened their reassessment notices last month.

But many home and business owners remain concerned their taxes could skyrocket when bills go out this fall, and county legislators continue to express criticism of the process that resulted in some big increases in property values on the tax rolls.

The legislature, powerless to reverse steep increases on one third of the county’s 300,000 real estate parcels, is expected to vote Monday on a resolution sponsored by eight of its nine members . It asks that the State Tax Commission investigate whether assessment director Gail McCann Beatty and chief administrative officer Ed Stoll followed all the rules before raising some property values as much as 400 percent.

Don’t expect a lot of sympathy, though, from Jefferson City. This is the same State Tax Commission that, The Star has learned, dinged Jackson County — and two dozen other counties — for setting values too low during the 2017 reassessment.

“...your county (is) out of compliance with State Tax Commission (STC) requirements,” a letter dated April 4 from the commission addressed to Beatty said.

Counties that receive such letters have a choice: jack up property values or risk losing state funding for the biennial chore of determining the true market value of every real estate parcel within their borders.

And finding the true market value is what Beatty says she set out to do, leaving it to the tax districts to decide how much to lower their levies to relieve some if not all of the hurt. Indeed, as things stand now, taxes are likely to decline on nearly a third of the county’s homes and businesses.

Beatty wouldn’t be the first assessor in Missouri to feel such heat for trying to meet state standards. Callaway County Assessor Jody Paschal was under orders from the Missouri State Tax Commission a few years ago to hike property values so they better matched market reality in the county east of Columbia.

Like Jackson, Callaway County fell short of meeting the state mandate that requires that overall residential values on the tax rolls be within 10 percent of market value. And for Paschal, that meant ordering big boosts for some taxpayers in and around Fulton, the Callaway County seat.

Increases ranged from 20 to 200 percent, and his constituents — unlike in Jackson County, most Missouri assessors are elected — were not happy.

“For a lot of time, I thought my middle name was ‘you sonofabitch,’ ” Paschal said.

Like here, some homes were closer to market value than others before Paschal began trying to comply with the state mandate. The result was that some taxpayers were paying more than their fair share, and others were getting a break. Paschal’s job, like Beatty’s, was to establish greater equity.

Older homes in neighborhoods with a mixture of housing stock were the hardest to peg, he said. Some had been recently renovated. Others hadn’t been fixed up in years.

Likewise, Beatty has acknowledged missing the mark in some neighborhoods such as Hyde Park, where a homeowner filed a lawsuit claiming her older home was assessed above its market value.

But errors always happen, and Beatty says she has attempted to correct those. And if taxpayers still find fault with her decision, they can appeal to the Board of Equalization or even the State Tax Commission if they disagree with the BOE.

“We have found some irregularities and we are addressing that now,” she told a group of angry homeowners at a meeting of the county legislature recently.

But to critics who say the whole process was a botched and cruel attempt to hike property values on the tax rolls, Beatty’s supporters in county government and her peers say that’s baloney.

She says she tried as best she could to make up for her predecessor’s mistakes and set assessed values as close to market value as possible.

Following the law

The impact that has on people’s property taxes should not be a consideration, says Clay County Assessor Cathy Rinehart. Local governments set the tax levies, she says, not the county assessment department.

Under state law, most cities and school districts are required to roll back their levies rather than benefit from a huge tax windfall when values go up. As for those who aren’t required to roll them back, such as the Kansas City School District, there is nothing to stop them from doing so.

“Everybody raises hell when their value goes up,” Rinehart said, “but I’m supposed to find market value. That’s the law. That’s all I’m supposed to do.”

Home prices have recovered nicely since the housing market crash a decade ago, but county assessment rolls have not kept pace in the hottest markets. Assessors in 24 of Missouri’s 114 counties, as well as the assessor for the city of St. Louis, were served notice since the last reassessment cycle, in 2017, informing them that they were “out of compliance” with state tax commission requirements.

They had all fallen short of setting values on residential properties high enough to reflect the actual value of people’s homes. Some had held back because they weren’t sure whether the increased values were a bubble or a trend, Rinehart said. Others were reluctant to raise values, fearing a backlash if they did.

The majority of the counties out of compliance were in the state’s larger urban areas — around Kansas City, St. Louis, Springfield, Columbia and Joplin — as well as around the vacation hubs of Branson and Lake of the Ozarks.

Locally, Jackson, Clay, Platte and Cass counties all began the 2019 reassessment cycle with instructions from the State Tax Commission to increase values.

“We had to look at residential, because our residential was out of tolerance,” Cass County Assessor Roger Raffety said. He raised values 5 to 15 percent on nearly all 50,000 properties in his county, but he’s still shy of the goal set by the tax commission.

“The bottom line is I’m out of compliance right now,” Raffety said.

Platte County Assessor Dave Cox thinks his values are above the 90 percent of market value threshold the state requires, but is not sure the commission believes that. “We don’t agree with their methodology,” he said.

Both Cox and Rinehart in neighboring Clay County say a change in how the state measured their compliance in 2017 was unfair. The measurement relied on house sales that occurred after the deadline for counties to set values, which is Jan. 1 in every odd-numbered year.

“They want to push the values a lot higher,” Cox said of the tax commission.

Jackson County was just slightly out of compliance after the 2017 reassessment. But some neighborhoods were way off. And due to rising market values the past two years, officials working for County Executive Frank White feared falling even further out of compliance had the assessment department not ordered big increases in 2019.

However, they did not relay those fears publicly until after the assessment notices went out and county legislators were blindsided.

Physical inspections

The resolution before the legislature on Monday says Beatty failed to follow state law by not physically inspecting every real estate parcel whose value increased by 15 percent or more.

Beatty denies this. She claims her staff inspected the exterior of those properties by either driving by or taking a look at satellite, aerial and street view pictures of them online. No interior inspection is required by the law, but if pictures of the inside of the house were available online, the county’s assessment staff took a look at those, too, one official said.

Theresa Galvin, the legislature’s chairwoman, faults that approach.

“To me a physical inspection is one where you go to the property and take pictures,” she said Friday in a text message. “Call me crazy but if you’re going to raise someone’s property value 400% you might want to even knock on the door.”

As controversy continues to simmer in Jackson County, Paschal said this year’s reassessment in Callaway County wasn’t nearly the bear it was the last go-round. Real estate values now meet the state’s standards and people weren’t as upset as they were when it all started.

Their assessments went way up, but taxes didn’t rise as much thanks to the levy rollbacks required by the state, he said.

The Hancock amendment keeps most taxing jurisdictions from realizing big windfalls when values soar. They can increase real estate tax collections for their operating budgets (excluding improvements and new construction) by only the rate of inflation and then never more than 5 percent.

That allows for a 1.9 percent increase this year. However, nothing keeps taxing districts from keeping their budgets flat if they want to ease the burden on taxpayers hit by sky-high assessments.

Many people didn’t understand that when they got their tax bills in Callaway County. They blamed Paschal after one school district gave itself a big raise by not decreasing its debt levy. Those aren’t subject to the same cap.

Stung by the criticism, Paschal referred callers to the school board members who approved the increase.

“I had all their names and numbers and told people, ‘I’m not the one who raised your taxes, they’re the ones that raise your taxes,’ “ he said.

Others would say that raising taxes is more of a team effort. But until city councils, school board, library systems and all the rest set their levies, the focus is on one player. Rinehart says that’s unfair, but after nearly 23 years setting values as Clay County assessor she says it’s part of the job.

“We are the red-headed, bastard stepchild,” she said.

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Mike Hendricks is a member of The Star’s investigations and watchdog reporting team. Send tips and story ideas in confidence by email to mhendricks@kcstar.com, Twitter direct message @kcmikehendricks, or anonymously via Signal encrypted message at 816-234-4738
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