Lindbergh tax increase proposal fails; Property tax bills likely to jump anyway
April 13, 2005 - Lindbergh School District voters last week rejected a 65-cent tax-rate increase, but homeowners may not think so when they see their property tax bills.
Proposition A, a tax-rate increase of 65 cents per $100 of assessed valuation, lost by more than 2,000 votes last week, according to unofficial results from the county Board of Election Commissioners.
But unusually high reassessments in St. Louis County likely will allow the Lindbergh Board of Education to collect more revenue from homeowners anyway.
"(Reassessment) may be the thing that gets us through to next year because you know there is the legal option to roll the tax rate up to $2.75," said Pat Lanane, Lindbergh's chief financial officer and assistant superintendent for finance, referring to an estimated $3 million budget shortfall for the next school year.
"We're going to have to come up with some way to balance the budget," said board President Mark Rudoff, who won re-election April 5 for another three-year term. "But I have to reserve a little bit of comment until I see (Lanane's) presentation and know what impact reassessment will have."
Residential property values increased about 12 percent districtwide, according to the St. Louis County Assessor's Office. Under state law, however, Lindbergh can't collect revenue on that entire 12 percent assessment increase because assessment growth for taxing purposes is capped at 5 percent or the Consumer Price Index, whichever is less, based on the Hancock Amendment.
So Lindbergh will have to refund the taxpayers by rolling back the operational tax levy, which currently is $2.70, not including the debt-service levy, which is about 44 cents. Lanane predicts the Hancock Amendment will drop the operational levy to about $2.50, based on that 12 percent reassessment increase.
However, Missouri gives school districts the authority to set operational tax rates to $2.75 per $100 assessed value without voter approval if the rate is below that, and $2.75 will collect much more than it did last year because assessments have increased.
"That's going to be around one and a half million dollars (of new revenue)," Lanane told the Call. "That is significant. And you know what, we'll still have the lowest tax rate in St. Louis County."
Plus, it will cost more to homeowners. Businesses may not be affected because commercial property values may not receive the same unusually high reassessments.
Every 10 cents on the tax rate costs someone with a $200,000 home about $38 annually, Lanane said. So if the board adds 25 cents to get the legal minimum of $2.75, that same homeowner would pay about $95 more next year. But it depends on the home. Some assessments increased 20 percent or more, while some may not have increased at all.
And the board would have the decision to increase the rate or leave it where the Hancock Amendment sets it.
After making nearly $2 million in cuts the last two years, spending down reserves by about $2 million and facing an estimated $3 million deficit next year, raising the tax rate is likely.
"(Administrators) haven't presented us a formal plan yet," said board member Katie Wesselschmidt, referring to the reassessment scenario. She was the leading vote-getter in last week's election. She was re-elected last week to a third term.
"We're going to look at all our options," Wesselschmidt told the Call. "We have to know, 'What impact will reassessment have?'"
"If (Lanane) projects 25 cents, that gives us a little bit of wiggle room," Rudoff told the Call. "But that's only a short-term solution. It may have softened the blow for the immediate future, but it hasn't helped the long-term fiscal standing of the district."
Even if the board raises the rate, expenditures still exceed revenues next year and every year after if the district doesn't increase revenue, Lanane said. To plug the budget hole, the district will consider expenditure cuts along with alternative ways to increase revenue, such as student fees, Lanane said.
"We'll be looking at a portion of it coming from that legal minimum (tax rate) and a portion of it coming from our reserves," he said. "I don't believe the board's going to let us use much. I'm sure they won't let us use more than $1 million.
"I think we'll be looking at some fee increases, maybe even some new fees for students, and then I think we'll be looking at reducing some services and personnel ... teachers and administrators," he added. "Remember, the $2 million in cuts we made the past two years were custodians and teachers' aides. Now we're going to have to go to the teachers that have direct contact all day with the students. Some class sizes will go up. There's no magic pill to get around this."
Rudoff said, "It's going to force us to make some hard decisions. At least we've let people know what would be coming. We know that there are going to be some cuts. We're going to have to come up with some way to balance the budget.
"It's going to be, 'What's the reassessment, and what's the impact going to be? But that's not going to help us long-term," he said. "We need some clarity as to what the state's going to do with funding and what kind of impact this reassessment is going to have.
"I respect what the voters had to say, but now we're going to have to deal with a revenue shortfall," Rudoff said. "(Reassessment is) only a short-term solution."
Wesselschmidt said another tax-rate increase referendum is possible, though she didn't commit to anything.
Newcomer Bob Foerstel, who also won a three-year seat on the board in last week's election, was unavailable for comment before press time. Foerstel replaces board Vice President Barry Cooper, chief financial officer of the Laclede Gas Co., who lost his bid for a third three-year term.
Referring to the defeat of Proposition A, Lanane said, "It's disappointing. I'm disappointed for the community because it's kind of a step backward, and I'm disappointed for the kids because it's going to have an impact."
The Citizens' Association for Responsible Education, however, celebrated Wednesday.
Jim Smoot, president of the Green Park Chamber of Commerce, and his wife, Rose, founded the ongoing committee to defeat the tax-rate increase and force Lindbergh to live within its current budget.
"It was our goal to protect south county residents from out-of-control taxation," Jim and Rose Smoot stated in a press release.
"The plight of our senior citizens, working-class families and small-business owners cannot be overlooked.
We also wanted to ensure that our children and grandchildren would not be forever burdened with more and more taxes," they added.