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USD 408 to lose tax revenue

Staff writer

USD 408 Superintendent Lee Leiker told the board of education Thursday that the district will collect less money in property taxes in 2011 than in 2010.

The difference will affect the district’s budget, which Leiker is currently figuring for the 2011-12 school year.

“We’ll kind of decide where the difference comes up,” Leiker said. “It’s not going to be in any one area.”

With figures gathered by Marion County Clerk Carol Maggard, the assessed value of property in the district is $26,084,22, down from $26,767,417 in 2010 — a $683,195 difference.

“I’m just trying to understand because the numbers have fluctuated and our numbers will fluctuate,” Leiker said Friday. “It’s a disturbing trend for our district because it’s trending down.”

What was puzzling to board members was the fact that real estate valuations in the district are up $385,103, $17.6 million from $17.2 million. State valuations, for businesses and services that cross county lines — railroad, pipelines, and utility companies — are up $364,706, nearly $6.7 million from $6.3 million.

County appraiser Cindy Magill said 2010 was the outlier year where the district received a “windfall.”

The biggest negative difference was the oil produced from wells in the county. The production was assessed at nearly $2 million in 2010 and $729,358 in 2011, down more than $1.2 million. The reason for this drastic change was that Metro Energies, an oil company in Tulsa, Okla., did not properly file its taxes in 2010.

Metro Energies opened several new wells in the school district in January 2010. The new wells were part of an increase from 2009. However, the company failed to file a rendition — a two year history of their production — to the county by April 1 that year.

The appraiser oil clerk, required by the state to file taxes on the wells, evaluated the production using figures from the Kansas Geological Survey Website, which were not accurate for the actual production of the wells.

Using a figure of between $62 and $65 per barrel, depending on the quality of the oil, assessed yearly from the Kansas property evaluator at the time Mark Beck, the county oil clerk determined the value of the well. In addition, the county slapped Metro Energies with a 50 percent nonfiling fee.

Metro Energies filed a rendition on time this year.

All of these factors add up to the district’s property valuation in oil being twice as much in 2010 as it is in 2011.

The second largest negative revenue in the county is personal property tax — down $155,626, and $1 million from $1.2 million.

Magill attributed the three-year decline in property tax values to two Kansas law changes. The first allows people to write off personal property — such as boats — sold after the first of the year. If a man sells his boat in March, he only needs to pay three months of taxes.

The other law change featured commercial personal property — machinery, computers, and furniture. Before 2006, all of those items fell under personal property taxes. The state legislature passed an exemption for such items in 2007. When businesses upgrade those items, they no longer pay taxes.

“Let’s say they had a 1980 machine, generating $1,000 in taxes,” Magill said. “The new equipment then replaced it and was not taxable.”

Severed mineral valuations were also down from $57,909 to $7,114. Even after they sell property, owners can hold onto severed mineral rights to pull resources from the ground — including oil.

Maggard, who oversees severed mineral rights, said the difference occurred between July and November 2010 but could not pinpoint the reason why the numbers increased. She said severed mineral rights documents are not public record.

Last modified July 20, 2011

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