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Wednesday, May 4, 2016

Pierce City taxes changed by impact of new law

Friday, August 28, 2009

City leaders in Pierce City were surprised last week when they met to pass the annual tax levy hearing and discovered that the same law that impacted the Barry-Lawrence Regional Library had changed anticipated city revenues.

Aldermen expected to vote on tax levy rates similar to last year. Instead one of the city's three property taxes fell, due to Senate Bill 711, passed by the Missouri General Assembly in 2008, and two others rose.

The city's property tax to pay for general operations had been set in 2008 at 51.47 cents per $100 of assessed property. Instead, Senate Bill 711 reduced taxes back to what voters originally approved, which was a 46-cent levy authorized in 1986.

The state auditor adjusted Pierce City's general fund tax to 47 cents per $100 of assessed property, gaining an extra cent due to shifts in property assessment.

When tax rates were first released earlier in the year, the impact of Senate Bill 711 had not been included. The first rate released to the city called for a levy of 53.62 cents for the general fund. Clerk Julie Johnson calculated the loss in revenue between that amount and the subsequently reduced rate at $5,928.41.

Pierce City's other property taxes for the park and fire protection were originally passed in 1986 at nine cents per $100 of property. Voters approved a four-cent increase in the fire protection tax in 1998 and a four-cent increase for the parks in 2000.

The property tax for the Barry-Lawrence Regional Library, which ran into serious problems because of Senate Bill 711, was rolled back to a lower amount than voters approved. The subsequent increase was added onto the rolled back total, leaving less than had been expected.

Senate Bill 711 applied the same formula to Pierce City's taxes for the park and fire protection but with much less impact. The Hancock Amendment rolled back the nine-cent levy a couple cents by the time voters approved the four-cent increases. In the original projection of this year's taxes, the state auditor figured both would run at levies of 11.5 cents. Had the ballot language on the tax increases listed a ceiling, both taxes would be at 13 cents now.

The purpose of the Hancock Amendment was to keep tax levies from bringing in windfalls when property valuations rise. Hancock authorized adjustment of the levy to keep the payout comparable to the amount approved by voters. The problem with Senate Bill 711 has been the voter-approved amounts have been replaced by the Hancock rollback calculation, then further adjusted by the state auditor for fluctuations in property assessments.

In the case of Pierce City's fire protection and park taxes, a second look at voter intent under Senate Bill 711 and a recent drop in property assessments pushed the levy up. The original projection of an 11.5 cent levy for each tax for the coming tax cycle was raised in the final analysis to 11.98 cents.

Mayor Carol Hirsch was not pleased to see a reduction in revenue for the general fund after watching sales tax income lag this year. Seeing no alternative, aldermen passed the levy as adjusted by the state auditor.

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