Last year the Missouri legislature updated a law allowing residents aged 62 and older the option to “freeze” their property tax bill, so it doesn’t go up. This year, school districts are bracing for a drop in revenue as a result.
Property tax revenue is a major source of funding for local public schools. The Audrain County Commission recently approved the tax freeze for area residents; this will be the first year the policy is in place.
Troy Lentz is superintendent of Mexico Public Schools in Audrain County and said the budget impact of the freeze won’t really be known until local properties are reassessed and revenue is collected at the end of the year. Until then, he’s proceeding cautiously.
“I wish we were in an environment where we were more confident that we could expand our support for teachers and kids,” Lentz said. “But, the legislation was passed and we're going to move forward with what it is.”
Lentz estimates that traditionally, funds for local schools from property taxes grow by 1.5 - 2% each year. He said he’s “all for” seniors having tax relief, “but it does come at the expense of local taxing entities.”
Public schools leaders are crafting their budgets now in advance of the fiscal year that begins in July. That’s as changing policies on both the federal and state levels make the process more uncertain.
Lentz said staff salaries and insurance plans are the largest part of the Mexico district’s budget and those elements have been finalized. However, state lawmakers could still pass bills that affect how schools bring in and spend money.
“The challenging part is you don't know what people are going to do in Jefferson City until after the legislative session closes,” he said. “It's nearly impossible to start really working that much on revenues, unless you just want to go off of trends.”
Cristina Wright is Superintendent of Moberly Public Schools and is planning for a future drop in school funding due to the property tax freeze. Missouri counties can implement the tax freeze by passing an ordinance or through a countywide vote.
Wright said the Randolph County Commission adopted the widely-supported provision this year and she thinks it could have a big impact on schools.
“Between 20 and 25% of our tax base falls in that category of 62 plus,” Wright said. “So we have to be predicting the future and the future impact, which is tricky to do, because some of the finer points of the law are not defined.”
Wright said she’s also watching whether the state legislature decides to support charter schools through new laws, and whether that’ll further divert public school funding.
Additionally, last week President Trump signed an executive order that aims to close the federal Department of Education, which would likely impact local public school funding that comes from the U.S. government.
“Would the state then allocate the funding from the federal government to public schools, and at what rate?” Wright said.
“Those are all questions that are very timely, very of the moment, and directly impact the way we build a budget for the next school year — which is happening right now.”
