SB 711 Provisions
by Chris Straub
July 29, 2008
Earlier this year, MASA sent the following information to school administrators regarding SB 711 and its implications for school districts as you set your tax rate. We have received some clarification from the State Auditor's office related to this legislation.
1. The next reassessment year will be 2009. Present law states that tax rate increases voted in reassessment years determine the tax rate ceiling for that year, regardless of reassessment. SB 711 changes the law so that tax rate increases are subject to adjustment due to reassessment. Therefore, school districts planning to ask their voters to increase the operating tax rate after September 1, 2008 need to be aware that the operating tax rate established as a result of a successful election will be subject to reassessment adjustment when the district sets its tax rate during the summer of 2009.
If a school district asks its patrons to approve a phased-in tax increase over a two to three year period of time, and it is approved, the tax rate in effect as a result of the phased-in increase will be subject to adjustment each reassessment year.
2. Present law subjects a school district's tax rate ceiling to adjustment during reassessment years. School districts using a voluntary reduction in setting their tax rate have not been required to lower their levy unless the tax rate ceiling is lowered enough by reassessment to fall below their actual levy.SB 711 requires that, beginning with the reassessment year of 2009, school districts adjust their actual tax rate resulting from a voluntary rollback, in reassessment years in addition to adjusting their tax rate ceiling. The state auditor's office has confirmed that this legislation will not impact a school district's ability to set a rate of $2.75 by Board action. The auditor's office also has confirmed that in non-reassessment years (even numbered years), if a school district has a voluntary rollback, they may increase their levy to the district's Hancock tax rate ceiling following a public hearing and an affirmative vote of the Board of Education.
The setting of the tax rate this summer (2008) will therefore be important. School districts may want to consider doing away with all or a portion of their voluntary rollback to their operating tax rate when setting their tax rate this summer.This, of course, may have serious political consequences with taxpayers. However, school administrators should discuss with their board of education the new law and the consequences it has for school districts voluntarily levying less than the authorized Hancock tax rate ceiling.
3. SB 711 includes new ballot language for school districts bond issues. Please note that this law does not go into effect until August 28 and therefore the new language can not be used for bond elections in August. The new language is as follows:
" The questions on bond issues in all districts shall be submitted in substantially the following form:Shall the ........board of education borrow money in the amount of..... dollars for the purpose of.......and issue bonds for payment thereof resulting in an estimated increase to the debt service property tax levy of .....(amount of estimated increase) per one hundred dollars of assessed valuation? If this proposition is approved, the adjusted debt service levy of the school district is estimated to increase from .....(amount of current school district levy) to ......(estimated adjusted debt service levy) per one hundred dollars assessed valuation of real and personal property."
Important Information for Districts with Large Increases in Railroad and Utility Assessments
The following counties have experienced a dramatic increase in Railroad and Utility Assessments according to the State Tax Commission: Audrain, Buchanan, Caldwell, Carroll, Chariton, Clinton and Randolph. If your school district is located in or partially within one of these counties, please contact Becky Webb at the State Auditor's office at 573-751-4213. She will assist you in how to account for this growth on your state auditor's form in order to avoid a significant tax rate decrease because of this growth.
