COLUMBIA — Columbia Public Schools may face a budget deficit of up to $500,000 because of lower than expected assessed valuations for Boone County.
The total of assessed valuations, or the value assigned to property, for Boone County is expected to increase by 0.48 percent rather than the 1.5 percent originally projected. Assessed valuations are used in determining tax rates and in budgeting.
Boone County Assessor Tom Schauwecker said the decrease in expected revenue is due to a large drop in assessed valuations throughout the county for personal property, which dropped by about $36.3 million from 2008.
“Never in my life have I seen that kind of a hit,” said Schauwecker, who has been the county assessor for 20 years. “These numbers reflect what’s going on in our local economy.”
Nick Boren, chief operations officer for Columbia Public Schools, said the higher the assessed value, the more revenue the district receives from property taxes. Roughly 60 percent of the district’s revenue comes from property taxes, he said.
Based on recommendations from the county assessor, the School District used the expected 1.5-percent increase to determine its 2009-10 budget. But because the assessed valuations were lower than expected, the district will not have as much money as the Columbia School Board expected.
“The implications of this are that we will have to be extremely vigilant to achieve a balanced budget,” said Superintendent Chris Belcher in a news release.
Linda Quinley, director of business services for Columbia Public Schools, said the board could look at making budget reductions later, but it is too early to tell how the revenue loss will affect this year’s budget.
The district’s initial budget of $157.9 million contained a $2,600 surplus, Boren said. He said the district’s actual revenue is likely to increase before the end of the year but not enough to make up the estimated half-a-million dollar shortfall it currently faces.
“It’s not an exact science,” Boren said.. “In my 16 years of building budgets, I’ve never been dead on.”
The district can operate on a deficit budget, Boren said, but the money will have to come out of Columbia Public Schools' reserve fund at the end of the year. The reserve has about $27 million.
Schauwecker said assessed valuations for personal property are expected to get better, but not enough to offset the loss.
Personal property taxes are collected on all vehicles, including boats, planes and motorcycles, machinery and tools, and mobile homes. Schauwecker said the biggest hit to personal property revenues is because fewer people are buying new cars. He said the value of vehicles, especially trucks and SUVs, “fell off the table.”
“What was valued at $28,000 went to $14,000,” Schauwecker said.
Part of the reason these vehicles are being valued so low, he said, is because assessors are required by state law to use an October 2008 version of the National Automobile Dealers Association official used car guide. At the time, gas was $4 a gallon, he said, and people were not buying vehicles that were expensive to fill up at the pump, thus lowering their value.
Personal property valuations for Columbia fell by more than 8 percent, or $22.5 million, since last year.
Although expected gain in personal property revenue for the county dropped, real estate assessed valuations increased by about $45.3 million from last year. Schauwecker said the most surprising gains came in commercial real estate, which saw an increase of nearly 5 percent.
The county’s increase in total preliminary assessed valuations has steadily declined for several years. In 2005, valuations increased by more than $117 million, compared to about $9 million this year.
Boone County Auditor June Pitchford could only be reached briefly, but said she anticipates the lower-than-expected gains to affect the county as well.
“We budgeted for a very modest revenue increase, 1 to 2 percent, so it will likely mean budget cuts for the county,” Pitchford said.