Retirees Lillian Johnson and Rieta O’Neal live on opposite ends of St. Louis County, but they share the same taste in an American luxury sedan.
Each owns a 2014 Cadillac XTS. And each got her personal property tax bill in the mail from the county this month.
Johnson’s tax bill was $895. O’Neal’s was $436.
Across the St. Louis area, people are writing checks to pay their personal property taxes, which are due by year’s end. Residents of St. Louis all pay the same rate. But St. Louis County residents are not assessed evenly — far from it.
All county residents pay the same real estate and personal property tax rates for certain services, such as county government and community colleges. But the rates for public schools, fire protection and municipalities vary dramatically. The boundaries don’t overlap cleanly, so even next-door neighbors can pay different rates.
The personal property tax is less cumbersome for people who drive older cars. A Kirkwood resident with a 2012 Volkswagen Jetta pays $151 this year, for example.
But tax rates on real estate and personal property are much higher in areas of St. Louis County where more low-income earners live. And the disparity is growing larger.
“Why not a flat rate?” asked Johnson, who lives in the tiny north St. Louis County community of Velda City. “We always pay more than West County, South County, mid-county. It’s horrible. We need to go on one flat rate for St. Louis County.”
A Post-Dispatch analysis of tax data shows that since 2010, the personal property tax has become a much more significant part of all taxes collected in St. Louis County.
The total amount of real estate taxes assessed in St. Louis County has increased 18 percent since 2010, to $1.75 billion. By comparison, during that time the total amount of personal property taxes grew by 21 percent, to $280 million.
The personal property tax has steadily become a major revenue generator for municipalities and fire districts. Municipalities have increased their personal property tax revenue by 27 percent since 2010, to $9.1 million. And fire districts across St. Louis County have increased the amount they collect from personal property by 30 percent, to $31.8 million.
Johnson’s tax bill is more than double O’Neal’s in part because the school and fire districts and municipality where Johnson lives are strapped for cash. She sees a Caddy parked in her driveway; her leaders see a way to pay for teachers, cops and firefighters.
Even O’Neal doesn’t think that’s fair. She knows that sales taxes from the West County Mall help subsidize services for her area.
She’s not happy that her fellow retiree across town is getting stuck with a bigger bill.
“I don’t know why they think they can get away with it,” she said. “I guess because they do.”
The capital of tax
When it comes to real estate and personal property tax rates, Velda City is in a class of its own.
Just seven years ago, its residents were paying $1.65 for $100 of assessed real estate and $1.68 for personal property.
Those rates have doubled. This year, Velda City taxpayers are paying rates of $3.25 for real estate and $3.13 for personal property.
No other municipality has tax rates — for either real or personal property — of even $2.
Velda City residents this year are paying the highest overall personal property rates in St. Louis County, when the tax rates from Normandy School District and Northeast Fire and Ambulance District are included. Residents pay $14.41 per $100 of assessed personal property.
The lowest personal property rates in St. Louis County are within parts of the Ladue School District: $6.68.
From highest to lowest, that’s a disparity of 115 percent. In the city of St. Louis, the personal property tax rate is about $8.28.
Asked about tax rates, several Velda City officials said they weren’t aware they were higher than anywhere else. Velda City is surrounded by stretches of north St. Louis County that have personal property and real estate tax rates that are significantly higher than areas south and west.
Late last year, Valerie Fusselman, 62, a medical tech who lives in Bellefontaine Neighbors, heard the irresistible call of zero-percent financing and traded in her 2007 Subaru Outback for a 2017 model.
It seemed like a good deal, until her personal property tax bill arrived from St. Louis County this month. She owes $1,180.
A reporter reached her the day her tax bill arrived; she was still in disbelief. It didn’t make her feel better to find out that of the 100 people in St. Louis County who own a 2017 Subaru Outback, she got the biggest tax bill by $135 over the next highest. Meanwhile, in west St. Louis County, there are five taxpayers with the same car who are paying $620.
“The people who can afford the most tax are paying the least amount of tax,” Fusselman said.
The opposite is generally also true. Those who can least afford the highest tax rates are paying them.
“You’ve got a lot of poor people up here, and you’re taxing them, and they can’t afford it,” said Bellefontaine Neighbors Mayor Robert Doerr. He’s frustrated about tax increases voters approved for the Riverview Fire Protection District that will go into effect next year. “We’re being taxed to death.”
A burden shifted
It may come as no surprise, but rich areas can raise cash much easier than poor areas.
Take the Parkway School District. All of the real estate there combined is worth $4.2 billion, compared to $215 million for Normandy School District. Parkway has 17,400 kids enrolled, and Normandy has 3,100.
So Parkway’s real estate is worth nearly 20 times that of Normandy School District, but it enrolls only five-and-a-half times as many kids.
The state’s school funding formula established in 2005 was designed to smooth out this disparity and ensure adequate funding for public schools.
But the state Legislature for years failed to fully fund the formula, shifting the burden to the local districts. The formula is considered fully funded for the first time this year due to a legislative change that lowered the funding bar. That forces some school districts to set higher real estate and personal property tax rates.
Residents of Hazelwood School District pay $6.52 per $100 of assessed real estate, and $6.65 per $100 of personal property. For comparison, the rates for Ladue schools are $3.81 and $4.02.
Those gaps create a disincentive to live in or bring jobs to the areas that need residents and economic activity the most, said St. Louis County Assessor Jake Zimmerman.
For example, why would a developer build an office building on Natural Bridge Road in Normandy when he could build one in Creve Coeur and pay half the real estate taxes?
Tax increases “didn’t happen because anyone was trying to do anything bad,” Zimmerman said. “The only thing Normandy and Riverview Gardens and other school districts were trying to do was stay in business and pay their teachers.”
For one area of the county to have tax rates for real estate and personal property that are double other areas of the county is “profoundly unfair,” Zimmerman said.
“When you talk about challenges the region faces, this is a big one, and it doesn’t get talked about enough,” he said.
A stark difference
If two taxpayers live in properties in the same area with the same values, they pay the same amount of property tax regardless of their incomes. It could be considered regressive, because the tax has a comparatively greater impact on a taxpayer with a lower income.
In St. Louis County, the tax landscape is beyond regressive, because real estate and personal property rates are dramatically higher in low-income areas. The disparity is not as easy to see with real estate taxes, because lower-income owners generally live in much less expensive homes.
For example, a resident of Claremore Drive in Velda City with a home appraised at $29,000 pays $807 in real estate taxes. If residents of Kent Road in Ladue paid the same tax rate on a home appraised at $1.8 million, they would pay more than $50,000 in real estate taxes.
Because Ladue’s real estate tax rate is less than half of Velda City’s, the Ladue residents’ tax bill is just shy of $25,000. That’s still a lot more than $807.
But St. Louis County’s tax disparity is much more stark when you consider a car, which has the same value in Velda City or Ladue.
Yvonne Jones, 70, is a retired nurse who lives in Velda City. She is paying more to own a 2015 Buick Encore than any of the 138 other people in St. Louis County with the same vehicle: $650.
The second highest bill in the county is $585 — for a married couple in Wellston.
The people who will pay the least for that year, make and model are a married couple in Town and Country, who pay $316.
Jones said she bought the car in 2015, so she is a year removed from the shock. Last year, her personal property tax bill was $828.
“I said, ‘What? I didn’t buy any half-million-dollar car,’” she said. “I was totally shocked when I got that bill.”
At that time, her advice to a relative considering a move to her neighborhood was, “You don’t want to move here.”
Zimmerman said the tax disparity is holding the St. Louis region back — and could be heading for a breaking point.
“It’s part of the collective unfairness in which this region finds ways to make you pay more if you live in less affluent parts of town,” he said. “There is only so much tax unfairness that the voters can take.”