Auditor Fitzpatrick finds property tax appeals process in Jackson County unfairly disadvantaged taxpayers

A flawed and inadequate 2023 property tax assessment process in Jackson County that failed to comply with state law was further exacerbated by an appeals process that stacked the deck against taxpayers according to a new report from Missouri State Auditor Scott Fitzpatrick. The audit released today gives the appeals process a "poor" rating while finding it was ineffective and noncompliant with county code and state law, and also noting the Board of Equalization failed to operate transparently or maintain its independence over the process.

"The bottom line is taxpayers in Jackson County got a raw deal and were in effect dealt a losing hand by the Assessment Department and the Board of Equalization. State law makes it abundantly clear that the burden of proof in the appeals process is on the Assessment Department and not the taxpayer. Despite this, the Board of Equalization set up a system in which county officials held all the cards and homeowners had to fight an uphill battle on an unlevel playing field," said Auditor Fitzpatrick.

The report from Auditor Fitzpatrick finds the Jackson County Assessment Department (AD) had an unfair advantage in the appeals process because the Board of Equalization (BOE) failed to require the department to meet its statutorily required burden of proof to support its valuations. Specifically, the BOE failed to require the AD to provide an appraisal to support its computer-assisted valuation, as required by statute, which may have prevented taxpayers from obtaining accurate assessments. The BOE also accepted testimonial evidence from the AD that was not substantiated by supporting documentation while taxpayers were required to provide documentation to support their testimonial evidence.

The review of the process found photographs were the only evidence required by the BOE as proof of physical inspection by the AD and some of the allowed photographs were taken outside the reassessment period. The report notes the reliance on photographs as evidence of inspection—particularly when the images are not taken within the required timeframe—fails to demonstrate that the AD performed the statutorily required physical inspections for properties with valuation increases exceeding 15 percent. The BOE also failed to require the AD to prove it properly notified taxpayers of their right to request an interior inspection according to state law even though the BOE was aware that notifications were late. The report also finds the AD did not make supporting documentation for its appeals available in a timely fashion to taxpayers who had scheduled appeal hearings. In some cases, taxpayers were forced to submit sunshine requests to obtain the documents. The failure of the AD to provide timely information gave taxpayers little opportunity to evaluate the AD's evidence and put them at a disadvantage during the hearings. The BOE also failed to sufficiently notify taxpayers of their hearing dates. The report found 35% of taxpayers (33 of 93 cases reviewed) did not receive notice of their BOE hearing by mail or email 7 days prior to the hearing date, as required by county code.

The audit also finds the significant number of appeals that resulted from the AD's mismanagement of the reassessment process made it difficult for the BOE to exercise appropriate oversight of the appeals process and made the appeals process more challenging for taxpayers to navigate. The appeals process was also reduced in effectiveness for taxpayers because the BOE did not take appropriate steps to train members on changes in state law or adjust procedures as required by those changes. The BOE also failed to maintain its independence from the AD and potentially misled taxpayers as it allowed the AD to send correspondence and perform certain duties on its behalf. The BOE did not review any of the correspondence or work done by the AD on its behalf. The BOE also failed to act in a transparent manner as it did not take minutes for any of the 13 closed sessions held from January 4, 2023, through December 5, 2024, as required by state law.

Another finding in the audit details how the process for filing an appeal was cumbersome and made more difficult by the limited time and lack of information available to taxpayers. The process to request an appeal was not clear to many taxpayers and the AD's website was confusing to navigate. Many taxpayers received notice of the right to an interior inspection less than 2 weeks before the appeal deadline, which gave them insufficient time to request and receive an inspection before the deadline. Despite known issues with assessment notices, the AD was reluctant to support extending the appeals deadline and the BOE did not change the deadline until a few days prior to it. The BOE voted on July 7, 2023, to extend the appeals deadline to July 31. This information was made public on July 9, which was 1 day before the deadline.

The report also looks at the hearing process that was limited in its effectiveness because of a lack of review by the BOE and an incentive for hearing officers to resolve cases as quickly as possible. The BOE did not have information available to review a negotiated assessed valuation because hearing officers maintained little or no documentation to support their valuations. The BOE did not adequately review or approve assessment modifications taxpayers agreed to with the AD or in hearing officer hearings. The report finds hearing officers had an incentive to mediate as many appeals as possible. Their contracts provided an allowance for bonuses of $100 if the officers could get 30 signed agreements per day. The report notes the incentive could have led officers to limit their documentation and rush cases to try to achieve the bonus.

The audit report also makes note of the level of resistance provided by the AD, the BOE, and other county officials, who acted to prevent the completion of the audit. Officials limited information and only provided access to necessary AD and BOE records after being served multiple subpoenas. As a result, delays occurred in completing the audit. Additionally, the county assessment process was subject to multiple lawsuits, which the county claimed caused further delays in their responses.

"We were invited in by the Jackson County Legislature to conduct this audit and yet we were met with resistance from the Assessment Department at every turn and forced to involve the courts to obtain the documentation we needed. It's unfortunate this process has taken so long, but I'm glad we can finally put this information in the hands of taxpayers so they can see all the details of a process that was as flawed and stacked against them as I'm sure they suspected," said Auditor Fitzpatrick. "I'm glad to see the county legislature and current County Executive have agreed with our findings and in many cases already put our recommendations into place. But let's be clear, Jackson County has to make dramatic improvements so taxpayers can have a fair process they can trust."

The audit of the Jackson County Assessment Appeals Process can be found here. Fitzpatrick said his office will also release a report in the coming months that provides greater detail on the reassessment process.