Lincoln County, Mo. - Recent events from the halls of a Jefferson City courtroom were felt all the way in Lincoln County.
On June 22, The Missouri State Auditor’s Office notified more than 2,800 local taxing authorities they no longer had the option to calculate local tax rates using a subsection of a state law that was found to be unconstitutional.
In Blankenship v. Franklin County Collector, the Missouri Court of Appeals, Eastern District ruled that Section 137.073.5(2) is unconstitutional in allowing the rate to be raised above voter-approved rates.
Approximately 600 of the 2,800 political subdivisions relied on the law to calculate a local tax rate above the rate approved by voters.
In that case, the Court of Appeals ruled the Strain-Japan R-XVI School District in Sullivan’s tax levy, which was approved by voters in the November 2012 election, was unconstitutional because of the formula that was being used.
Two of those taxing authorities affected by the ruling reside in Lincoln County: Lincoln County R-II in Elsberry and Lincoln County R-III School District in Troy.
LCR3 said it was notified of the decision by the Auditor’s Office on June 25, and it is discussing any implications on the existing levy with staff with the Auditor’s Office.
Fifty-six percent of Troy’s voters passed Proposition S, a levy transfer for LCR3 schools, in April’s elections.
“To date, all tax levies established by the Lincoln County R-III School District have been in full compliance with the Missouri State Auditor’s Office and state statute and have received proper authorization,” LCR3 Superintendent of Schools Dr. Mark Penny said. “The district will continue to work with the State Auditor’s Office to gain further understanding and clarification of this ruling.
“Following the receipt of all necessary information, the Lincoln County R-III Board of Education and Administration will consider what options are available and make a final decision to be acted upon at the tax rate hearing, to be held in late August, for the Fiscal Year 2021-22 levies. In the event any levy modifications become necessary, additional information regarding these matters will be forthcoming.”
Elsberry voters narrowly passed Proposition 2, a ballot initiative that placed a 45-cent tax levy increase, which would be used to increase teacher salaries, by one vote in April’s elections.
Elsberry R-II District Superintendent Dr. Tim Reller said the district has no idea the immediate impact the Court of Appeal’s decision will have on the newly passed levy. What he does know is it was good for the State Auditor’s Office to give them a “heads-up,” by sending them the letter.
“There’s a process we have to follow with the State Auditor’s Office,” Reller said. “We have to change our starting point (on how to calculate our tax rate).”
Reller, like Penny, said a clearer fiduciary picture would be painted after his district’s August meeting.
According to the Auditor’s Office, local government entities are solely responsible for setting their tax rates. The State Auditor’s Office provides the required forms for local governments to enter their property tax rate information and then reviews the rates they set to determine whether the rates are compliant with state law to ensure revenue neutrality.
The State Auditor’s Office does not make recommendations on property tax rates or increases nor does it set tax rates.