A high Jackson County property tax assessment doesn’t always mean high taxes. Here’s why

Homeowners in Jackson County have just a few days left to contest their property valuations before the county’s July 10 appeal deadline.

Many have told The Star that their sky-high valuations are causing stress and confusion. But what does the county’s assessment of your home’s value actually mean for your property tax bill?

While many homeowners received high tax estimates on their value notices over the past few months, these numbers are based on 2021’s tax rates. You won’t know for sure what your actual tax rate will be until your local taxing jurisdictions decide on their levies later in the fall.

Here’s what to know about the relationship between your property value assessment and the tax bill you’ll receive later in the year.

What is a taxing jurisdiction?

Taxing jurisdictions are the local groups that provide a variety of services in your area. They’re also the groups that set property tax rates, called “levies,” which combine into the overall rate homeowners have to pay.

These groups include your local school district, fire stations, libraries, city and county governments, community colleges and special funds for things like mental health resources and services for people with disabilities.

Taxing jurisdictions overlap in a complicated web of coverage areas, so your exact combination of tax levies might be different from the house next door or your friend down the street. You can check which taxing jurisdictions you belong to by looking on the back of your paper value notice.

If you didn’t receive a value notice in the mail, you can find out your taxing jurisdictions by looking up your property in the county’s parcel viewer and clicking on the “Where are my tax dollars going?” link.

Here’s where an average Jackson County taxpayer’s property tax bill went in 2021:

How is my property tax bill calculated?

Your home’s property tax bill is calculated in three steps:

1. Market Value x Assessment Rate = Assessed Value

First, your home’s market value is multiplied by the county’s assessment rate. This rate just depends on the type of property you own — not on its location within the county. Here are the current rates:

• Residential property: 19%

• Agricultural property: 12%

• Commercial property: 32%

For example, if your residential home is worth $100,000, its assessed value would be 100,000 x 0.19 = $19,000.

2. Assessed Value - Exemptions = Taxable Value

The next step is to subtract any tax exempt portions of your assessed value to get the property’s taxable value.

Tax exemptions come from the function that your property serves. For example, if your property is a house of worship or houses a nonprofit organization, you may not have to pay property taxes on part of it. The deadline to apply for a property tax exemption was March 1.

In our example, if half of your property is exempt from taxation, your taxable value will be $19,000 - $9,500 = $9,500.

3. Taxable Value x Combined Tax Rate = Tax Bill

Finally, your taxable value is multiplied by your total property tax rate to get your final tax bill. Remember that this tax rate isn’t decided by one specific group. Instead, it’s a combination of smaller tax rates from all the groups that provide services in your area. Your rate depends on the exact location of your property.

To finish up our example, let’s say this year’s tax rate for your specific location adds up to 8%. Your tax bill would be $9,500 x 0.08 = $760. This would be the amount you owe in property taxes for 2023.

What will my tax rate be this year?

It’s hard to say for sure what this year’s tax rate will be, but Missouri law does set some limitations.

A provision in the Missouri state constitution called the Hancock Amendment prohibits most taxing jurisdictions from raising more money from property taxes than the amount they need to operate. That means if property values go way up, the levy they charge has to go down.

Most jurisdictions can only raise extra money for new construction or improvements, or to match the rate of inflation. And, the increase can’t rise above the percentage of residents’ income taxed in 1980 — 5.6% — without voters’ approval.

The exception to this rule is the Kansas City Public School District, whose tax levy is decided by the school board due to a 1995 Supreme Court ruling. The district needs voter approval to raise its levy above the 1995 level of around 4.96%, but it does not need to lower its rate when property values go up.

The KCPS school board’s decision to leave the district’s levy the same in 2019 caused controversy when some homeowners saw significant increases in their tax bills, some by as much as 23%. Since the bulk of your property tax bill goes toward your local school district, its levy will play the biggest role in determining how much you owe.

On the back of your paper valuation notice from the county, you can find estimates of what your local taxing jurisdictions will charge and what rate you may end up seeing. However, these rates are merely predictions. The exact levies won’t be finalized until the fall.

Why are assessors telling me to call my school board?

While your county collects property taxes, it plays only a small role in determining what tax rate you will pay. A far bigger portion of your overall tax rate is decided by your local school district.

You can find your school district’s contact information here. Last year’s public hearing on the Kansas City Public School District’s tax rate was held in late September — we’ll continue to report on how you can weigh in on yours this year when more information is available.

Do you have more questions about how your property valuation will impact your property tax bill? Ask the Service Journalism team at kcq@kcstar.com.