Pushing almost a decade of economic recovery, Americans are thinking the clock is ticking on this economic honeymoon phase. The Dow Jones took more...
Presenting “the facts pertaining to property tax valuations” in this publication, Boone County Assessor Tom Schauwecker this month wrote about a “133-acre vacant tract of land located on the southeast corner of Nifong Boulevard and Sinclair Road, across from Mill Creek Elementary.”
He noted that the land was zoned “agricultural,” but left out several other facts.
The owner, a prominent real estate developer, paid around $1.9 million for the property 10 years ago. In a Deed of Trust on file with Boone County, a “General Development Plan” assigns a “Per Acre Release Payment” for subdivision purposes of $19,950/acre, valuing the tract in 1998 somewhere north of $2.5 million.
Today, power, water, sewer, cable, and gas lines stud the property and it has a fire hydrant on the corner. Neighbors say the parcel hasn’t been farmed in years. The assessor says it’s farmland and qualifies for low, low property taxes.
Under Missouri law (RSMo 137.016 and 137.119), working (italics mine) farmland is taxed far lower than commercial or residential land. But the key word is “working,” and zoning doesn’t count.
To qualify for the tax break, the law is clear: The land must be actively farmed (italics mine), or its “highest and best use” must be agricultural. Land zoned “agricultural” that isn’t farmed and has a “higher and better” use doesn’t qualify. The caveats have been affirmed many times, most recently in 2004 when the developer of Northland Village challenged Jasper County Assessor Tom Davis before the Missouri State Tax Commission.
Nonetheless, the owner of that 133-acre parcel-who long ago decided that its highest and best use was development- paid less in property taxes on it last year than he donated to Mr. Schauwecker’s re-election campaign: $275.04.
Prime property, paltry taxes
All around Columbia and Boone County, prime development property produces paltry property taxes, zoned agricultural-or not.
An 18.2-acre residentially zoned tract in Thornbrook complete with cul-de-sac netted $50.86 in property taxes on an assessed value of $865.00 last year. A 12,600 square foot commercially zoned lot on Bernadette Drive and Fairview Road netted local governments $14.89 on an assessed value of $260.00. Eleven residentially zoned acres on Walcox Drive netted just $283.00.
Vacant land isn’t the only campaign donor/real estate developer-owned property that qualifies for such big breaks. Mr. Schauwecker appraised a four-bedroom, four-bath, 2,373-square-foot duplex built in 1999 for just $739 last year. That’s right: $739.
City v. County
As if Columbia and Boone County need something else to bicker about, the county assessor and city planners often conflict on land use and zoning, another factor driving low, low taxes on development land.
For instance, the assessor says that parcels in a subdivision off Scott Boulevard are farmland, while Columbia zoned them R-1 several years ago, for residential single-family homes. Individual lots in the subdivision – many with foundations – are on sale for $49,000 and up. But Mr. Schauwecker says they’re worth only $8,600 each.
At CrossCreek, amidst neighbor-developer scuffles and City Council brouhahas, city planners zoned 28 acres “planned commercial,” or CP. But Mr. Schauwecker insists that the acreage remains a bucolic farm, and taxed its owners accordingly: $40.57.
Cost to Schools
The owners of a prominent Columbia retail center have been advertising their last vacant tract For Sale, a planned commercial or CP-zoned 1.4 acres. “Suitable for retail, restaurant, or office” according to the ad, adjacent neighbors include some of the nation’s best-known eateries.
The 1.4-acre tract’s list price: $1,228,392.
Using a phrase Mr. Schauwecker has said many times to the media-Tell me how much you’d sell it for, and that’s what I’ll say it’s worth-a wily buyer would write up an offer and attach the assessor’s appraisal: Mr. Schauwecker says the $1.2 million parcel is worth only $182,950-and that it’s “farmland,” of course.
For Boone County’s public schools, libraries, cities, and roads, the difference between the assessor’s appraisal and the developer’s price amounts to a property tax loss of $22,100.49, or the difference between what the developer now pays-$1,307.35 -and what he would pay if the parcel were valued closer to its list price: $23,407.84.
More Than Equal
Under the law, all landowners should be treated equally. But in Boone County, some landowners are clearly more equal than others.
Take a 0.23-acre vacant lot in a low-income central city Columbia neighborhood that yielded $89.38 in property taxes last year, while 77.2 acres along I-70 – 335 times more land – brought in $83.35. Mathematically, that works out to a property tax rate 1,480 times higher for the central city parcel.
A prominent developer owns the I-70 tract and I own the central city lot. Though I didn’t donate to his re-election campaign, whatever explanation, whatever spin Mr. Schauwecker puts on the law cannot explain, morally, ethically, legally, or in any other way, why he taxes my land nearly 1,500 times greater than the developer’s land.
Nor can he adequately explain a $739 duplex; farmland in the middle of a strip mall; or a $275 tax bill on choice acreage that’s probably worth $10 million today.
Dickens famously said, “The law is a ass.” But it’s not that much of an ass, despite our assessor’s assessments.