Washington School District officials met last Thursday with Franklin County Assessor Tom Copeland to learn more about the significant drop in assessed valuation.
“We were told that about a third of our assessed value loss is due to the Mercy takeover of Patients First which wasn’t a surprise,” said Superintendent Dr. Lori VanLeer, who met with Copeland along with the district’s CFO Shelley Kinder.
Since Patients First was acquired by Mercy, that property is tax exempt since it is now in a nonprofit status.
The loss of Patients First as a taxable property represented a $12.3 million decrease in the county’s assessed value, according to Copeland.
That change in value was not initially reported on the assessed value report for 2013. But the change was recently reflected in a follow-up report of the county’s 2013 assessed values.
“The rest of the assessed value puzzle is due to reassessment and cleanup,” VanLeer told The Missourian.
“We were told a number of parcels or properties were not classified properly and they have cleaned all of this up,” she said. “The real estate market has been on the uptick, but the properties are selling for far less, and thus the entire market value in that particular neighborhood drops at the time of reassessment.”
VanLeer said the Labadie/St. Albans area has been hit the hardest in decreased property values.
The county’s total assessed value, including personal property and real estate, for 2013 is $1.8 billion compared to $1.9 billion the year before. That is a decline of $81.5 million, or 4.4 percent. That is the largest decline in assessed value that has hit the county in more than 50 years.
Some agricultural property has been reclassified to residential, VanLeer said, which should help the district, but not enough to make a dent.
“New construction also wasn’t favorable at the time of reassessment,” VanLeer said they were told.
Most concerning, she said, is Copeland told them they could see a loss again next year and the next reassessment is a question mark.
“He (Copeland) is not optimistic, stating the next three to five years could be bleak,” she said.
The Washington School District takes in parts of three counties — Franklin, St. Charles and Warren — with Franklin County being the largest boundary area.
Kinder said it’s important the district receive regular data reports from the assessors so school officials can stay on top of the swings in assessed value. She noted that St. Charles County already does that and even provides a “heads up” when the market changes.
VanLeer said she wants to plan future meetings with the Franklin County assessor and all superintendents.
“We used to do this every year with no problem, and I think it’s in everyone’s best interest,” she said.
Kinder said transparency is very important.
“We need to know when property values are dropping,” she said.
VanLeer and Kinder said the district will have to take steps to tighten the budget.
“We’re already studying next year’s budget to see where cuts could be made or where we could restructure,” Kinder said.
School officials said given the bleak outlook on assessed values, the district cannot afford to lose any state funding.
“It would be devastating,” VanLeer said.
“We have to watch HB253 closely,” she said, which if overridden by the state Legislature next week could mean a loss of more than $800,000 for the district.
The Washington School Board previously passed a resolution urging the state Legislature to sustain the veto of House Bill 253
The bill would reduce tax rates for individuals and corporations and create a new deduction for business income reported on individual tax returns.
“Again, I don’t care about the politics, we just can’t lose any funding and we desperately need the school foundation formula (state aid) to be funded as it was intended,” VanLeer said. “Don’t forget that transportation dollars also have been cut in the past. This is a huge expense for us due to our size.”