Once the City of Poplar Bluff takes ownership of the Northwest Medical Center property, according to Butler County Collector Emily Parks, the city and county will see a reduction in tax-based funding, with the biggest hit impacting the Poplar Bluff R-1 School District.
Parks said she began compiling figures after the August vote by the city council to pursue contract negotiations that would move city hall, the police dept., and municipal court from the downtown area to a predominantly residential neighborhood on Barron Rd.
Parks said should Northwest Medical Center become city property, Butler County will lose nearly $100,000 in total property tax revenue, with Poplar Bluff R-1 realizing nearly $70,000 of that reduction.
"The total property tax paid on Northwest Medical Center for 2016 was $94,193.30," Parks said. "The Poplar Bluff R-1 School District received 67.84 percent, so $66,885.82, of that money, they will no longer receive if it becomes city hall."
To a public school system that operates entirely on local, state and federal tax dollars, any potential reduction is cause for concern said Superintendent Scott Dill.
"I have not been apprised of specific amounts at this point, but the estimates I have heard come roughly the equivalent of one teacher salary, with benefits," he said.
Poplar Bluff R-1 Superintendent of Finance Rod Priest said he typically budgets $50,000 for each teacher in the district. He said the amount covers salary, insurance and other expenses incurred throughout the year.
Priest said though a single $66,885.82 decrease will not make or break the district, it's not a trend he hopes to see continue.
"Unfortunately, if we still have some room on our levy, we'll increase it to make up the difference within the state guidelines," he said. This means the district would likely approve a tax increase to account for the loss.
Poplar Bluff R-1 already has experienced decreases to local funding in recent years. According to the 2016-17 audit, presented by Kraft, Miles and Tatum at Thursday's Board of Education meeting, district property revenues were reduced by $1,620,593 under agreements entered into by the City of Poplar Bluff through its Enhanced Enterprise Zone, formed in 2010, and Industrial Development Program, which impacts Poplar Bluff Industrial Park.
According to the report, the programs have stated a purpose of increasing business activity and employment in the city of Poplar Bluff and the amount of abatement is achieved through a reduction of assessed valuation for both programs.
Under agreements entered into on behalf of the Enhanced Enterprise Zone Program, district property tax revenues fell by $1,457,600. The Industrial Development Program abatement resulted in a $162,993 decrease. The abatement does not impact personal property.
"In the long run, these tax abatements are for the betterment of our community," Priest said.
For instance, at an August 2011 public hearing conducted by city council officials to discuss the proposed abatements, residents and business owners expressed concern, but ultimately, it was determined under the 25 year abatement, the school district would receive $9 million in property taxes over 18 years instead of $5 million over the program's last 10 years.
The boost came after Poplar Bluff Regional Medical Center agreed to pay 50 percent of its property taxes for the last 18 years of the enterprise zone. As a result, the taxing bodies will receive $6.4 million more than required under the enterprise zone agreement, a decision former superintendent Chris Hon fully supported according to statements he made at the time.
PBRMC also agreed to make payments in lieu of taxes during its first seven years. However, the seven year period is still underway.
Priest said although the Eight Points commercial development project, which is also included in the Enhanced Enterprise Zone, is funded by tax increment financing, the district currently collects a portion of the reduced property taxes paid by the commercial development.
"Under the TIF, they keep 50 percent of their property taxes, they pay 50 percent of their property taxes, and we get a portion of that," Priest explained, adding he considers this a benefit to the district because it allows a portion of the funds to be collected instead of the alternative, which is no portion collected.
Parks said should city hall remain downtown, Northwest Medical Center would stay on the tax books and continue to benefit the city and county.
"Any location city hall takes over will become tax exempt," she said. "They have to weigh the pros and cons. Is there another buyer for that location to make sure it stays on the books?"
Parks said, in her opinion, the best case scenario regarding local property tax revenue would be for the council to accept the Boeving family's offer to donate land, build a new structure, and then sell the Cedar Street, property to a buyer willing to make improvements.
"If someone bought it and fixed it up, that would increase its assessed valuation and generate more money for the school and the county," she said.
Parks, Dill and Priest said it is not their hope to influence decisions made by local leaders, but to stay abreast of the information as it relates to their positions in the community.
"It is not my place to weigh in on the politics of the issue," Dill said. "Rather, my concern is, and will be, the impact of the outcome on the school district. Ultimately the municipality will determine how best to move forward, and we will adjust accordingly."