Missouri’s State Tax Commission ordered Jackson County to roll back its 2023 property tax assessments, which raised homeowners property assessments by an average of 30% and more than 100% in some cases. Attorney General Andrew Bailey and county legislators called the order a win for homeowners. But city governments, schools, public libraries and first responders could face major budget shortfalls.
The order requires the county to roll back 2023 assessments to either their current level or a 15% increase from the last assessment, whichever is lower. For most taxpayers, that means assessments will be reduced to 2021 or 2022 levels, plus 15%.
According to the commission’s order, Jackson County did not meet the state requirement to notify, in writing, the majority of property owners whose assessments increased more than 15% from the last assessment that included a physical inspection.
In a statement, Jackson County Executive Frank White’s office estimated that schools and libraries in the county could immediately lose more than $86 million. Cities and fire districts could lose almost $20 million.
The commission says that Jackson County did not notify most property owners that a physical inspection was required or provide them with a clear notice of their rights relating to an inspection. The agency alleges that many notices were undated and did not include essential information about the assessments, and that the county did not physically inspect many properties as required.
At a press conference today, Jackson County legislators Manny Abarca, Sean Smith, Donna Peyton, DaRon McGee and Venessa Huskey said they supported the state commission’s order. McGee plans to introduce legislation to prevent the county attorney from challenging the order.
White’s office rejected the ruling and said the commission’s order was “politically motivated and inaccurate.”
“Our goal remains providing a fair and equitable process for all,” White said. “This order is not just bad for our taxing jurisdictions; it’s bad for our taxpayers. The process to fix decades of mismanagement and unfairness hasn’t been easy, but we are committed to doing what is right for our community.”
The County Executive’s office says the commission reviewed and approved its 2023 and 2024 reassessment plans.
“Despite this, and without any hearings or evidence, the Commission now asserts that we failed to meet statutory requirements,” White’s office said in its statement.
Lawsuits over jumps in assessed value
The order came during a class action lawsuit that Bailey and the tax commission brought against Jackson County. After the commission’s order was presented Tuesday, the court dismissed the lawsuit.
In a separate lawsuit brought against Jackson County by the City of Independence, the court found that the county’s assessments in 2019 and 2023 “demonstrate a clear disregard for the rights of Jackson Countians, a disregard for the budget process that taxing jurisdictions must undertake each fiscal year, and gross incompetence.”
The court deferred to the commission and state legislature to address the assessments.
Lee’s Summit also filed a lawsuit against Jackson County.
“We have to be grateful that the commission made this order in the way that they did, because it's validation,” said Lee’s Summit mayor Bill Baird.
Last year, Jackson County’s Board of Equalization, where homeowners could appeal their assessments, postponed hearings indefinitely. The commission said the board provided taxpayers with “insufficient or misleading information” during the appeals process, making it difficult for taxpayers to pursue their appeal rights.
Kansas City Mayor Quinton Lucas had his property taxes go up more than 60% under the last assessment. He said he understands the concerns of taxpayers, but is also concerned for the city and school district’s budgets.
“I hope we have accountability for our taxpayers, but also, frankly, for everyone who receives funding from them, including our schools, the city, so many others,” Lucas said.
Jackson County Legislator Sean Smith said White makes unilateral decisions without consulting the legislature. He said the county government needs to come together to fix things for taxpayers and taxing jurisdictions.
“That’s not for the cities and schools to figure out how to fix,” Smith said. “That's for this group and the administration to figure out how to fix. And I think we're all equally committed to fixing it in a constructive way.”
Kansas City area school districts could owe tens of millions
School districts in Jackson County say they would have to pay back millions of dollars if property valuations are rolled back.
The Fort Osage, Independence, Lee’s Summit, and Oak Grove school districts filed an amicus brief in May outlining the financial harm they’d face if the attorney general won his case and rolled back valuations to their 2022 values.
The school districts estimated that Fort Osage would owe $5,958,243, Independence would owe $16,083,539, Lee’s Summit would owe $31,867,939 and Oak Grove would owe $2,708,338.
Several school districts in Jackson County reduced the rates they ask taxpayers to pay in the fall to offset the increased assessed values.
“The Attorney General’s requested relief would force the School Districts to repay tens of millions of dollars in property tax revenues they have already spent to pay teachers, heat buildings, feed students, and buy textbooks, just to name a few expenses,” the brief said.
According to the brief, those tax rates can’t be increased to account for the reduction in assessed valuations. The brief said the school districts do not oppose corrections to those who lawfully challenged their 2023 reassessment, but said the attorney general’s petition violates Missouri law.
The brief said potential rollbacks would subject the school districts to “unprecedented revenue losses” as they increasingly rely on property tax revenues. Missouri schools rely heavily on local sources of funding, and the state ranks near the bottom of the U.S. in state funding for schools.
Moving forward
County legislators aren’t yet sure how the county will rectify the overassessments. The rollback of the 2023 assessments means that taxpayers paid more than $100 million than they needed to, according to the commission decision and the shortfalls White said the county will face. Abarca said refunds or cash repayments aren’t an option.
“$100 million — that's nearly an entire department,” Abarca said. “That's the Parks and Rec department from our budget line. So there's no ready cash able to flip that like a light switch and turn it on to a cash payment.”
Tax credits towards future assessments are a possibility, but all solutions would have to go through the state commission.
Baird said that he is concerned about the city’s loss of revenue, which could harm the city’s budget for years to come, but he’s more concerned with helping his constituents and making sure Lee’s Summit residents are not unfairly taxed.
Lee’s Summit also rolled back its levy to minimize the 2023 assessments’ effect on taxpayers. The city and its school district will face immediate budget shortfalls, but will likely manage.
If property tax cuts or reversals continue, that will mean more stress on the budgets of local governments, schools and libraries.
Baird said the county needs to provide guidance for taxing jurisdictions that will set their levies for next year in September.
“Jackson County needs to open the conversation up with the city, with the schools, with the cities and say, ‘How can we move this forward?’,” Baird said. “Because I can assure you, we were not consulted along the way. We've been trying to work with the county for years on a fair evaluation process and communicating with us ahead of time”
Lucas said that if the order leads to more lawsuits, he hopes they are resolved quickly “so that we can have predictability for our taxpayers.”
“We've approved a budget with a plan for what our tax revenues are going to be,” Lucas said. “I would hope that the State Tax Commission in Jackson County get this figured out as quickly as possible because we've got some real work to do.”
