TIF impact least of library's worries

When a taxing entity gets 90 percent of its funding from real estate taxes, a tax increment financing district that takes some of those taxes is actually one of the least of its worries.

So says Annie Busch, executive director of the Springfield-Greene County Library, and she should know. She has to study tax figures and make calculations before she can budget for the library.

What troubles her more than a possible reduction in real property taxes related to the TIF district is the cumulative effect of assaults on the property tax base that have occurred over the years from the TIF, to the enterprise zone that encompasses most of the city, to tax abatements, to the property reassessment rollback requirement, and now, a new state law that changes how the tax levy is calculated.

That last item could be extremely costly to the library, Busch said. "Property always was levied at the full penny for as far as I know. Now we have to levy it to a fraction of a penny," out to the fourth decimal place, to be exact, instead of the second.

That doesn't sound like a big deal, she said, but the change in how the levy is calculated, according to her preliminary calculation, might cost the library system $20 million over 17 years.

Some might argue that the reason behind the change is simple, she said. For years the library has been able to round up in its levy calculations. But some authorities, like State Auditor Claire McCaskill, who started the ball rolling to change the law, thought it was unfair. "That's a point of view," Busch said. But the fact that the change is immediate is unfair and stressful on the already stressed financial picture for the library, she added.

The library has always rounded up. It has budgeted and floated bonds assuming the past method would be the same in the future. But with the change going into effect this year, "there's no chance to recoup," Busch said. The library district's bond liability was based on predicted income, and a reduction in income is "difficult to compensate for," Busch said.

Add to that monetary loss the reduced income from the state-mandated rollback of the tax levy. In odd years the county reassesses property and, through a complicated formula, the levy actually drops if the increase determined through the formula is more than the cost of living and would therefore result in the library receiving a windfall, she said.

Busch worries about the 50 percent reduction in real estate tax growth that comes out of the enterprise zone that encompasses most of the city and its industries.

She also worries about legislation that was passed for apartment owners whose property is taxed at the lower residential rate, not the higher commercial rate. That eats at the tax base, too, she said. "That's a big impact."

Also, the trucking industry's tax contribution has been reduced by state legislation. Greene County, home to many trucking companies along the I-44 corridor, used to be able to tax the businesses where their headquarters are located, but the law changed that, Busch said. Now there is a complicated mileage formula that requires the companies to pay monies to each county their trucks pass through. It must be a bookkeeping nightmare for the trucking companies, Busch said.