Property Assessment Issues Complicate Missouri School Funding Reform Efforts
Missouri’s effort to modernize school funding hits a snag as property assessments lag behind market values, affecting how state aid is distributed to districts.
JEFFERSON CITY, MISSOURI — Problems with how Missouri counties assess real estate values are creating significant obstacles for state officials working to modernize the formula that determines public school funding across the state.
During a meeting Monday morning, the Missouri School Funding Modernization Task Force examined how property tax assessments could be incorporated into an updated funding formula as real estate valuations fail to keep pace with market inflation. The discussion took place in the education department’s state board room in Jefferson City.
“Property values and property taxes have been used to fund schools, in part, because of the stability of it,” said Kari Monsees, the state education department’s former finance chief and task force facilitator. “Stability is an attribute for it, and now it has destabilized, at least in the short term.”
Assessment Accuracy Essential for Fair Distribution
The accuracy of local property assessments is key in Missouri’s need-based school funding system, which adjusts state aid based on available local resources. Schools in areas with higher property values receive less state funding, while districts with lower local resources get additional support.
“The more local resources you have, the formula provides a little less. If local effort is really low, it provides a little more,” Monsees explained. “But if those values are not accurate, then it is really tough for the formula to meet schools’ needs.”
According to Monsees’ estimates, nearly two-thirds of Missouri students live in counties that are assessing home values below 90% of what the State Tax Commission considers market value.
COVID Market Surge Exposes Assessment Problems
The State Tax Commission conducts evaluations of county property assessments every two years through ratio studies that compare actual sale prices against county assessor valuations. Jeff Schmidt, who works as a local assistance technical consultant with the Missouri State Tax Commission, told task force members that the latest report revealed more counties out of compliance than he had witnessed during his decades-long career.
“When COVID came and the market really shot up, that is when we noticed the counties falling dramatically behind,” Schmidt said.
The assessment challenges stem partly from Missouri state law, which prohibits county assessors from increasing property valuations by more than 15% annually without conducting physical inspections of the properties. This restriction has created a significant gap between assessed values and actual market prices in many areas across the state.
Task Force Seeks Solutions for Funding Formula
The Missouri School Funding Modernization Task Force continues working to develop recommendations for updating the state’s school funding mechanism. The property assessment issues represent one of several technical challenges the group must address as it works toward creating a more equitable and effective funding system for Missouri’s public schools.
The task force’s discussions reflect broader concerns about ensuring state education funding reaches districts most in need of additional resources while accounting for varying local economic conditions across Missouri’s 114 counties.
