Districts impacted by assessed valuations

Wednesday, August 8, 2012

Due to a decrease in assessed personal property valuations, area school districts could be required to increase operating tax levies during the 2012-13 school year.

"Looking at the assessed valuations, we are seeing impacts of lost industry and jobs," said Richard Asbill, Cassville superintendent. "We have seen around a $1.6 million loss in new construction and personal property assessed valuation.

"With the reduction in other funding pieces, the operating levy becomes an issue," said Asbill. "Last year, we were able to lower our operating levy by five cents. This year, we are looking at recouping that nickle in a non-assessment year in order to collect revenues to help fill some of the void."

The Monett R-1 School District is being impacted by the decrease in assessed valuation even more severely than the Cassville School District. The Monett District will see a $6 million drop in the assessed valuation of personal property this year.

"We are being impacted more severely than everyone else in Barry County because of the amount of industry located in our school district," said Brad Hanson, Monett superintendent. "Dr. (John) Jungmann anticipated this after he talked to Sherry Sears (county assessor) earlier this year. He reported this to our board in June before he left."

Sears said the huge decrease in assessed valuation, which is linked to the depreciation of property, should be a one-time drop for area districts.

"The depreciation schedule used for business personal property, including furniture, office fixtures and business equipment, is pre-approved by the state tax commission," said Sears. "Six years ago, assessors were given the choice of changing to the new depreciation schedule. June Smith (former Barry County assessor) chose to continue using the old depreciation level instead of forcing districts to take the loss at that time."

According to Sears, Smith's choice gave area political districts an opportunity to collect more revenue over the last five years.

"This year, the five years ran out, and I was mandated to choose the new depreciation schedule," said Sears.

The older depreciation schedule required businesses to multiply the value of equipment purchased in 2005 or before by 30 percent and then divide the amount by three in order to determine the assessed valuation.

Under the new depreciation schedule, businesses must multiply equipment value by 10 percent and then divide the amount by three to determine the assessed valuation.

"If property has a value of $150,000 and that is multiplied by 30 percent and then divided by three it will be much more than when multiplied by 10 percent," said Sears. "That alone is a huge decrease, especially in Monett where they have all the industry. It also impacts Cassville some, but the hardest hit towns will be those with big industrial plants, which have larger costs for business equipment."

Although the assessed valuations will decrease dramatically this year, drops in property values have been impacting districts for several years, said Dr. Alan Crader, former Republic superintendent, who now serves as a consultant for LJ Hart and Company.

"With the housing prices dropping and businesses closing for various reasons, over the last three to four years, assessed valuations have been shrinking," said Crader. "This year, districts are facing two options, reduce expenditures to accommodate the loss in revenue or hold their own by doing something with their tax rates.

"I have worked with 50 to 60 school districts in the last two months," said Crader. "This is occurring across the state. It is not confined to southwest Missouri."

Crader said school districts must address the issue of decreased assessed valuation this year, because increases to the operating levy can only be made during non-reassessment years.

"It is never easy to ask for a higher levy, but when times are good and assessed valuation grows, many area districts, like Monett, have rolled back their operating levy," said Hanson.

The Monett School Board will consider an eight- to 10-cent increase to its operating levy, said Hanson. The district's current levy is $3.09.

The Cassville School Board will hold a tax rate hearing to discuss its current and proposed operating levy on Aug. 16.

For more information, call 847-2221.

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