A sudden — and in some cases massive — jump in Jackson County property valuations was among circumstances that spurred state Rep. Elijah Haahr, R-Springfield, speaker of the Missouri House, in July to create an interim committee to look into the changes.
Haahr's committee, the Special Interim Committee on Oversight of Local Taxation, held its likely final hearing on the situation in Jackson County and on other taxation concerns Wednesday in the Capitol.
The committee's hearings have delved into property taxes, internet sales taxes and what he refers to as "knick knack" taxes — taxes created by special jurisdictions, committee Chairman J. Eggleston, R-Maysville, said.
"The purpose of this particular hearing is to brainstorm on some of the ideas we have heard this summer," Eggleston said, "and reflect on some of the testimony we've heard during hearings."
Shortly after Jackson County Director of Assessment Gail McCann Beatty took office, her staff sent out assessments to thousands of property owners — there are about 300,000 parcels in the county — notifying them of sometimes huge increases to their property valuations.
Missourians across the state raised concerns on how counties assess property tax values, Haahr said at the time. And they wondered about the fairness of what was being taxed. He called on the Missouri Legislature to ensure Missourians keep more of their hard-earned money.
And he tasked the committee with evaluating how local governments are determining taxes. Under its instructions, the committee reviewed the process of determining sales and property taxes, explored county property assessments, and looked at how local communities may benefit from internet sales taxes.
The property tax assessments have been a contentious issue all year, Eggleston said.
Criticism committee members heard during testimony was that Jackson County and the city of St. Louis were the only two governments in Missouri in which the assessor was appointed, not elected. And, during testimony in Kansas City (Jackson County), they learned one neighbor's assessment may go down while another went up, Eggleston explained.
McCann Beatty, a former representative, testified in Jefferson City in October that assessments on Jackson County properties had been suppressed for decades, causing a large number of home valuations to be well below market value.
Eggleston questioned how Jackson County then went about correcting the under-valuations.
"They opted for a one-time assessment correction," he said during Wednesday's hearing, "instead of inching them up over multiple assessments. 'Let's just take them up in one big shot.'"
That was the cause for "consternation," he said.
"The sticker-shock of homeowners seeing their values shoot up so much is a big thing," Eggleston said.
McCann Beatty reasoned the law requires her to assess all properties at market value.
"The problem with how that was done was that we had that inconsistent valuation from neighbor to neighbor," he said. "And also the 'physical inspection' law was skirted. It could be argued that the law was followed, but the spirit of the law was certainly not followed there."
Eggleston suggested the Legislature could do four things — clear up exceptions in state laws, cap valuation increases at less than 15 percent, change two-year assessment periods to four years, and base home values on their last sale prices, not market values.
Several years ago, St. Louis County implemented requirements for physical inspections of properties during assessments. That is a model the whole state might consider, committee members said.
However, a challenge is having the resources to do physical assessments, Warren County Assessor Wendy Norwald said.
Norwald attended the hearing to represent rural counties.
Warren County has 28,000 parcels to assess each cycle.
"It is physically impossible to get it done (in two years)," she said. "Our funding for our office has been cut every year. For us physically to get that done, it takes longer."
Assessors' offices are funded through revenue collected and disbursed by the state. When she took office in 2004, the disbursement was $6 per parcel. It is down to $3 per parcel.
The county's parcel count continues to grow, as does the workload, she said — while funding shrinks.
Having to do physical assessments would ask more of assessors.
"To physically go out and do that, it would take more funding, more manpower," Norwald said, "and a lengthier time period."
After about two and a half hours of discussion, state Rep. Craig Fishel, R-Springfield, said he wondered if the entire state were to be affected because of what happened in Jackson County.
"I question if we're here because of Jackson County on this issue," he said. "If Jackson County had not happened, would we be having this hearing?"
Fishel said he's "local-government-minded."
"I'm concerned that we're trying to affect the entire state — every county in the state — because of one issue in Jackson County, which is horrible," Fishel said. "We jumped in this right in the middle of the process."
Fishel said he'd like to know how far along the county and the Jackson County Board of Equalization — which holds hearings on personal and property tax assessment appeals — have proceeded toward completing about 28,000 appeals to assessments.
Lawmakers provided conflicting information Wednesday on how many appeals had been completed and how much the Board of Equalization had affected valuations.
The state Tax Commission reported 35 cases had moved on to that organization.
"I hate to start making statewide changes, based on information we don't have," he warned. "The cap on evaluations — I have a problem with that."
While the interim committee has been meeting, Fishel's community has been quiet on the issue, he said.
"In Greene County and our area, I just got my tax bill. It went up. It always does," he said. "There are going to be situations where there will be more than 15 percent on a piece of property. And I think it's fair that property be assessed on that actual value instead of giving them a tax break just because of Jackson County."
After a lunch break, the committee took up other issues it has considered this year.
Of the 45 states that have sales tax, only Missouri and Florida have no sales taxes on internet purchases, Eggleston said.
Legislators have tried in the past to tax internet purchases, he said. Bills have failed. Last year, about six "use tax" bills were filed in the Missouri General Assembly. All failed to pass.
"I'm thinking," Eggleston said, "we should pass some sort of Wayfair(ist) legislation to help our brick-and-mortar stores."