Cole County Assessor Chris Estes and local officials have been at odds during the past few years over stagnating reassessment values from Estes' office, an issue detractors say could have a large impact on businesses and the community.
An assessment places a relative value on a property for taxation, while appraisals are based on area property rates. Assessment rates vary greatly between commercial and agricultural property: Commercial lots are assessed at 32 percent of their value, while agricultural property is assessed at 12 percent. Residential property, meanwhile, is assessed at 19 percent of its value.
Property is initially assessed based on a percentage of the fair market value of a property, which is the amount a parcel could be willingly sold for by an owner.
Missouri also requires each county to undergo a biannual reassessment of all properties in odd-numbered years. Assessors are to submit a two-year assessment plan to the county commission and the State Tax Commission (STC) prior to the start of the year.
The biannual process is meant to create uniformity among tax rates across the state while keeping pace with changes in the market, according to the STC.
Stagnating values
While the state requires counties to reassess property values every odd-numbered calendar year, thousands of Cole County parcels haven't changed in value since 2007, according to Western District Commissioner Harry Otto -- and those that have received an update haven't stacked up to Otto's idea of the process.
"It's not so much about more, it's about being more fair," Otto said. "He has a responsibility to fairly assess them all, not just the ones that have been skipped since 2007."
Otto noted the levy, which funds the county's operations, is dependent on the assessor's valuations and could be called into question based on the stagnation.
Missouri's Hancock Amendment includes a provision that would roll back the tax rate in order for it to bring in the amount the community would have brought in under prior assessed values if an assessed valuation of existing properties increased by a higher percentage than the consumer price index.
In response to stagnating reassessment values, Estes said the numbers reflected a slump in the market following the 2008 housing market crash, the effects of which continued to be reflected in the numbers years after the housing values climbed back up.
Reassessments had to be considered using property values from three years before up to Jan. 1 of a reassessment year, according to Estes, meaning for 2021, his office had to use data from 2018 to the end of 2020, leaving any changes to the housing market that occurred during the actual reassessment year off the books until the next cycle in 2023.
He said the parcels that hadn't changed in value per his assessments truly hadn't as far as the reassessment process was concerned, even if the true dollar amount was different by the time the reassessment was completed.
An audit of the county's 2021 financials, compiled by accounting firm Williams-Keepers, found a large portion of the county's properties had not been reassessed in some time: According to the firm's findings, around 48 percent of the county's residential parcels had not changed in value since 2009.
Officials with the firm also found no change in around 40 percent of commercial properties, with 20 percent of agricultural parcels also remaining the same.
In total, 43 percent of the county's properties examined had not changed in value since 2009, the report found. It included a recommendation that the assessor's office stick to the statutory mandates for reassessment periods.
However, Estes noted the firm used 10 parcels out of tens of thousands in its analysis. He said the portion studied did not reflect the whole of the county's parcels and noted the valuation of a few of the properties included did actually increase slightly over the years, while others stagnated in value due to the market or the office's inability to do a visual inspection of the property.
Board of Equalization
Estes also noted he conducted numerous informal meetings with property owners who questioned their reassessment values, with many of the disputes resolved at that informal level. Parcel owners seeking to have their assessment re-evaluated beyond that can file an appeal with the county's Board of Equalization (BOE).
The BOE is made up of the assessor, commissioners, two appointed officers who are not county officials, and appointees from the city for parcels falling within that jurisdiction. It considers appeals annually, not just during assessment years.
While the County Commission's inquiries of Estes mainly focused on the stagnant values of residential properties, only one residential parcel owner appealed a reassessment with the BOE. A bulk of the issues were raised by commercial property owners.
Otto said last year's appeals were mainly leveled by venues that had seen diminishing visitors around the Jan. 1, 2021, evaluation date, including several hotels and Goodrich Capital 8.
Despite their appeals, the BOE mostly sided with the Assessor's Office, though Otto said he had sided with the theater's appeal.
None of the venues' owners responded to a request for comment.
This year's annual BOE meeting saw the board approve adjustments for two commercial parcels. The former Best Buy's valuation dropped from $5.9 million to $4.9 million, based on the business' closure since the assessment was made last year. The owner of the Jefferson Street Commerce Park, which formerly housed Wipro Infocrossing, sought a decrease in valuation after the business moved to the Capital Mall. The land's assessment was decreased from $2.1 million to $1.5 million.
With few reassessments occurring in odd-numbered years, those properties that do see a re-evaluation are on the hook for higher taxes to account for the levy, Otto contended. He said the venues bore high rates and propped up the levy despite reeling from the impact of the pandemic and the market of their respective industries.
Computer programs, staffing
Estes notifies owners of a change only if the value of their property increases, not if it stagnates or decreases. Commissioners noted around 1,300 parcel owners were notified of an increase last year out of more than 35,000 owners countywide.
Estes said his office hadn't been able to visually evaluate all of the properties it had planned to during the last cycle due to a commission-mandated change in software from ClearBasin, a mapping program he said he is more familiar with, along with a short staff.
The former program allowed the office to find similar properties when evaluating a parcel with a push of the button, Estes said, while the new one takes more time, produces skewed results, and requires time for its results to be adjusted. The office is still working to fix data from last year's reassessments, he said, creating a "nightmare" for his team.
Otto, meanwhile, said the program was the same one used by assessors in the St. Louis area and it should communicate well with the other programs the county makes use of.
Estes is seeking funds to hire an additional residential real estate appraiser and a commercial field reviewer to increase the efficiency of his office. He said he hoped to hire additional employees to get the office up to the STC-recommended 14 full-time employees and four part-timers in the near future, assuming it would be budgeted for by the commission.
The undertaking is currently being handled by him and 11 other people.
The coalition
Other local officials are also looking into the issue: Representatives of Jefferson City, Russellville and other Cole County communities called for a meeting with the commission and the Assessor's Office to discuss reassessment rates in a letter provided to the News Tribune.
The coalition also sought copies of the Assessor's Office's 2020 and 2022 two-year assessment maintenance plans, which outline the reassessment process for the following year and must be agreed to by the County Commission and the STC. Officials hoped to glean a better understanding of the plan and provide their feedback on the proposal if not yet filed with the commissions.
The collective pointed to a meeting held earlier that month assembled to discuss the county's low reassessment rate and its impact on local budgets.
Estes asked individual members of the coalition for a series of individual meetings ahead of an appointment with the group as a whole, according to follow-up emails provided to the News Tribune.
Estes said he had requested smaller meetings due to limited space within the assessor's offices, where he said the meeting had to take place to ensure all of the necessary information was on hand, he said.
Tempers flared earlier this month when Estes appeared before the Jefferson City School District Board. The board approved a 3.86-cent reduction to the tax levy compared to the previous year, with its CFO pointing to negative growth and said Estes had indicated in the meeting he had not handled reassessments over the past few cycles, vowing to assess half of the properties next year and the remainder in 2025.
Estes himself addressed the board during a public comment portion of the meeting; he opposed comments from previous meetings, indicating he had been unreachable when out of the office for an extended period of time earlier this year. He said those concerned about the process had not reached out to him to his knowledge despite an automated email response he said provided contact information for other people in his office.
The assessor said in an interview that he told the district he had been handling assessments, but that many parcels had not changed. He also said the negative growth was in large part due to a lengthy legal battle against local utility companies that appealed his assessment of their property, a battle that ultimately went to the businesses and lost an appraised value of $21 million in county income, largely effecting that district.
State Tax Commission
Despite pushback and questions from schools and other local officials, Estes said the State Tax Commission hadn't found an issue with his office's work. STC's biannual ratio studies, which evaluate how close assessments are to accurate property values, gave the county's 2019 reassessment a 92.89 weighted median in terms of its residential assessments, with a score of 100 percent signifying a complete alignment with market values, among the highest in the state.
Its variability of ratios, which shows how far off assessments are through a percentage, came in at 7.5 percent, also low compared to many counties that saw their variability creep far into the double digits. Its commercial assessments for the 2019 reassessment cycle were given a 95.35 median in terms of its proximity to market value, around the middle for the counties evaluated that year. Commercial parcels saw a variability rate of 22.3 percent.
Comparably-sized Cape Girardeau County scored a 91.49 weighted mean with a 13 percent variability ratio for residential parcels, with a 92.05 weighted median and 17.15 percent variability for commercial properties. Another county near in population, Buchanan County, received a 90.85 weighted median and 23.72 percent variability for residential properties as well as a 98.56 median and 29.18 percent variability of ratios for commercial properties.
Estes said scores had been even higher in previous years and the commission was aware of the issues his office was having. STC's chief counsel also confirmed to the News Tribune in an email the commission had not found the office to be out of compliance.
"I'm happy to work with anybody, and if people want to work with me and be upfront about things, I'm happy to do it," Estes said in an interview. "I think we do a heck of a job over here; I think the state ratio studies show that we're head and shoulders above other parts of the state in terms of accuracy. Does that change over time, or are there roadblocks that cause problems? Certainly."
With a new cycle right around the corner, Estes said the team was already working toward the 2023 reassessments. The office plans to visit half of the parcels for the 2023 cycle and the other half for the 2025 reassessments, he said, to ensure they get a full picture of the county's properties without spreading the office too thin.