The Jackson County Legislature was packed Monday afternoon with homeowners hungry for property tax relief.
The county clerk called the roll for a vote related to the ongoing battle over property assessments. A handful of “no” votes by legislators were met with jeers.
“What’s wrong with you guys?” called out one audience member.
“Greedy!” shouted another.
DaRon McGee, chair of the Legislature, smacked his gavel and threatened to clear the chamber if the audience had another outburst.
Residents were riled up because of a court ruling last week in which a judge sided with the Missouri State Tax Commission, ordering the county to roll back recent property assessment increases that were greater than 15% — roughly three out of four properties.
That led to Monday afternoon, when the Legislature voted 5-4 to order the county assessment department to comply with that order.
Now, many homeowners may (incorrectly) believe that big refund checks are on their way.
But that was never going to happen.
Last year’s property taxes have been spent — on things like teacher salaries, mental health services, fire prevention and road repairs. Even if the county rolls back its assessments, that money is long gone.
So what happens now?
The county may decide to issue tax credits to homeowners whose assessments spiked more than 15% in 2023. Those tax credits would likely be paid for with a “recoupment levy” to make up for the shortfall.
Essentially, all taxpayers would be paying more to offset the tax credits for the 75% who get assessment relief.
In the meantime, the housing market has continued to drive up property values. And now that the State Tax Commission has ordered Jackson County to reduce assessments on 75% of its properties, county leaders are getting anxious for the next assessment cycle, when they expect values to spike even higher than they did in 2023.
“We’re coming up on another tax assessment season right now,” County Legislator Megan Marshall said. “So you’re going to be right back here. It’s inevitable.”
Jackson County Legislature voted to roll back assessments but expects a veto
The county’s two-year fight over property assessments began when values spiked an average of 30% during the 2023 assessment cycle.
Property owners revolted — flooding the courthouse with appeals, filing a class-action lawsuit and gathering signatures to recall County Executive Frank White Jr.
In last week’s ruling, a judge found that the Jackson County Department of Assessment didn’t follow the state’s legal requirements to send out notices in a timely manner that would allow for homeowners to appeal their values. The judge also found that the county didn’t always inform homeowners that they were entitled to request an interior inspection if their property value increased more than 15%.
Marshall wants to make sure taxpayers have reasonable expectations about whatever refunds may happen.
The county and taxing jurisdictions can’t simply sign a check to return money to taxpayers without causing severe financial problems for the county and school districts.
Instead, the refunds would likely be issued as a tax credit applied to property owners’ bills for the next few years. To pay for those tax credits, the taxing jurisdictions would use a “recoupment levy” — a tax rate increase that’s typically used on a much smaller scale to adjust for property assessment appeals.
Essentially, all taxpayers would pay a higher tax rate next year to fund the tax credits that would be applied to the 75% of property owners whose assessments spiked the highest.
Marshall said she’s concerned that by rolling back the assessment increases now, the county might be jumping to an immediate knee-jerk solution that could backfire.
“Could (the 2023 reassessment) have been rolled out better?” she said. “Absolutely. I said that a long time ago. And that doesn’t change where we are now.”
That’s why she voted against the measure on Monday that would roll back the county’s property increases to comply with the order.
If “we just go ahead and rip the Band-Aid off and adjust everyone,” she said, “that’s going to have an effect for our schools, our fire districts and public safety.”
Doing that without hearing first from the schools and fire districts, she said, is irresponsible.
Legislator Sean Smith is less concerned.
He said he’s spoken with many of the school districts, and as long as the refund tax credits are rolled out over the course of a few years, rather than all at once, the districts say it’s “doable.”
The measure on Monday passed by a narrow margin of 5-4, but Smith said he expects White to veto it. That means the Legislature will need to find one more vote to override the veto.
If not, he said, the county risks facing even steeper consequences from the state of Missouri. One proposed bill would withhold all sales tax revenue from the county until it complies with the State Tax Commission order. Smith expects that bill, which is sponsored by Rep. Ron Fowler, a Blue Springs Republican, to pass.
Setting Jackson County up for another fight in 2026
Rita Jefferson, local analyst for the Institute for Taxation and Economic Policy, has been watching the Jackson County debacle with growing concern.
She has never heard of a state tax commission ordering a county to pay back taxes that have already been spent on schools, fire prevention and other services.
Similarly, Mike Ardis, a spokesman for the International Association of Assessing Officers, told The Beacon last year that he was unfamiliar with any case where a state has tried to void an entire county’s assessment increases.
Jefferson said that amid this fiery debate in Jackson County, what’s getting lost is that property values really are going up faster than most people realize.
The average property in 2023 saw an assessment increase of 30%, which she said is on par with real estate market trends.
“Everyone says: ‘This is crazy. My house didn’t accumulate 20% value in a single year,’” Jefferson said. “It probably actually did.”
The spike in home values since the COVID-19 pandemic is unlike anything that this country has seen in many years, she said. Even in the recovery from the 2008 recession, property values didn’t spike this quickly, which is why so many people have a hard time believing that it’s happening now.
“When you’re talking about normal property increases, 15% is a lot in a single year,” Jefferson said. “It really is. But the problem is that you’re dealing with a really unusual real estate market post-COVID for a lot of reasons.”
When a property value increases more than 15% in a reassessment, the county is required to offer the owner an interior inspection. But in 2023, more than 200,000 properties met that 15% threshold. That’s a lot of interior inspections.
“The county assessor’s office is dealing with a legal constraint that has no relation whatsoever to how real estate property markets work,” she said.
And now that the county is being ordered to roll back three out of four property assessments, county assessors will be required by law to make up that ground in the next assessment cycle. That could mean even bigger assessment spikes in 2025.
“You’ve rolled back your property tax values to something they aren’t anymore,” she said. “And there’s never going to be an efficient way for you to ever catch up.”
In the meantime, Jackson County’s director of assessment is concerned that rolling back the county’s highest assessment increases could redistribute the tax burden so that owners of lower-value properties pay a disproportionately high amount of taxes.
“This significant undervaluation could lead to reduced tax revenues and a disproportionate tax burden distribution,” Director Gail McCann Beatty wrote in a letter to the State Tax Commission. “Never has the STC issued an order that is retroactive and has such a negative impact on both property owners and taxing jurisdictions.”
Solutions on the state level
Marshall thinks the State Tax Commission could more proactively help the county on the front end — rather than trying to fix problems after the fact.
“If you see this massive amount of parcels are due an increase,” she said, “it’s like, hey, hold on a minute. Maybe we need to get the state in here. Do we have to do everybody at once? Can we stagger it? Can we phase it in?”
County Legislator Manny Abarca said the county has already submitted its 2025 assessment plan to the State Tax Commission. And it’s identical to the one that caused so many problems two years ago.
“It is 100% going to happen again,” Abarca said. “We know it’s going to happen the exact same way.”
Jefferson said that if the county wants to keep what happened in 2023 from recurring, it needs to make sure that notices go out on time.
“It sounds dumb, but it is the thing that is fundamentally why they got (in trouble with) the state,” she said. “If you don’t want state scrutiny, don’t violate state law.”
But beyond that, she said, Jackson County is going to need to advocate for more fundamental changes in Missouri.
“Unfortunately, any other suggestion I would have would require the state to change the law,” she said.
That could mean changing the in-person requirement for property assessments, which she said is outdated and very rare in big cities like Kansas City. Or it could mean that the state pays for extra staff to help with interior inspections.
County officials “could theoretically go and say: ‘Hey, this is a state law problem. We should work together to get this solved,’” she said. “But they’re not doing that. They’re pointing fingers at each other and saying, ‘Well, it’s not my fault.’”
This story was originally published by The Beacon, a fellow member of the KC Media Collective.
