Democracy on the Front Lines
City Administrator’s Blog
Walter Denton
June 21, 2010
Many of you have received in the mail your 2009 Property Tax assessment. The postcard lists last year’s assessment and what your assessment will be in your tax bill. I have used a lot of digital ink over the years (here and here) explaining the ravages of
the Township Multiplier, but you may have noticed the O’Fallon Township Multiplier is zero this year. (Unfortunately, the Caseyville Township Multiplier increased 3%.)
The City of O’Fallon also received the property tax assessments by St. Clair County. Our estimated EAV was $684,896,441 and the actual EAV was $658,370,306. The actual EAV and our requested amount on the levy resulted in a tax rate of 0.9080, which is a slight increase from last year’s rate of 0.8732. We thought our tax rate would be lower than last year, but we received a notice from the St. Clair County Clerk that our tax rate was automatically adjusted with a 4% “loss in collections” increase due to the large number of foreclosures and non-payments.
Based on a $200,000 home, here is the total City of O’Fallon Property Tax over the last five years:
2004: $393.26
2005: $410.59
2006: $420.26
2007: $390.80
2008: $422.09
2009: $437.39
Over the years, have heard numerous questions regarding the Township Multiplier, in particular why the Multiplier increases when property values are declining. The state uses a formula to determine the Multiplier using sale prices over a three-year period. The housing bubble years of 2005 and 2006 has phased out of the three-year formula, so we may begin to see more reasonable Multipliers in future years.
The County Assessor was scheduled to conduct a full assessment of all properties in O’Fallon township, but that did not occur. We believe the Multiplier will not be tamed until an assessment is completed. While there is no doubt that many homes in O’Fallon are over-assessed, there are also a significant number of homes that are under-assessed. These under-assessed homes are primarily in the older parts of town where there has not been as much turnover. In the annual report of homes sold last year, we identified 13 homes where the sale price was more than double the assessed value.
With such a discrepancy between sale price and assessed value, the multiplier then assumes the entire township is similarly under-assessed. As a result, the remaining property owners are over-paying because of the under-assessments of homes in the older areas of O’Fallon.
The solution to this problem is the same as we have suggested before: the City of O’Fallon needs a full and accurate assessment of all properties. St. Clair County claims they do not have the manpower and resources to conduct the legally-mandated quadrennial assessments. From our perspective, it is a fairness issue – a majority of property owners are subsidizing the property taxes for those under-assessed properties.
Comments or questions?
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