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Districts of Two Minds Over Who Should Get Tax Revenue

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A huge discount store built about 30 miles south of St. Louis may be a blessing to budget-conscious shoppers there, but it's become something of a curse to the like-minded school districts it straddles.

Once upon a time, neither the Festus district nor the Crystal City district paid much attention to the meager taxes that trickled in from the 26-acre tract of swampy land that came between them. For the past decade, the tract has been amicably divided into a north half, belonging to Festus, and a south half, belonging to Crystal City.

But times changed in 1993 when builders filled in the property and built the Super Wal-Mart and a smaller clothing store called the Fashion Bug.

Now, tax revenue from the $4 million plot of land is at stake, and the 2,300-student Festus district believes the money belongs to it.

"Our perspective is that, historically, the land belongs to us," said Robert Taylor, the superintendent of the Festus district, which sued its neighboring district two years ago over Crystal City's $63,000 annual share of the property-tax money. But officials from the Crystal City district say the current division of the property is fair.

The districts argued their cases last month before Circuit Court Judge Timothy Patterson in Hillsboro. Lawyers will file briefs this week, and Judge Patterson will decide, perhaps in the next few months, who should receive the disputed revenue. About $84,000 has been in escrow since the lawsuit was filed.

Assessment Error?

Unlike the school districts, city officials have not had a problem with the way the property has been divided.

Festus reaps the benefits of Wal-Mart's land on the north end, and Crystal City gains from the south end. And which city's police department responds to a theft report, for example, depends on which door the culprit uses to exit the building.

But about the time the Wal-Mart opened in 1993, a few members of the Festus school board remembered that at one time the land the store is built on had been entirely in the Festus district.

Research in Jefferson County records showed that, indeed, the property had been assigned to the Festus district from about 1870 until at least 1978. Some records were destroyed in a fire, and no one knows why the boundaries changed in the mid-1980s, Mr. Taylor, the Festus superintendent, said. Both school districts are within the Jefferson County boundaries.

But there must have been some mistakes when the state went through a reassessment in 1984, he said.

"The assessor's office improperly did not identify that city-limit boundaries are not the same as school-district boundaries," he said.

Mr. Taylor said his district collects slightly more than $3 million in local property taxes each year, so $63,000 in additional funds is not substantial. "But every little bit helps," he said.

"This has been pretty much of a friendly kind of lawsuit," he added. "But we feel we have an obligation to our own school district patrons, no matter how small the burden."

Effect on State Aid

Jerry Weber, the superintendent of the smaller, 650-student Crystal City district, said $63,000 can go a long way.

"That's enough for two teachers' salaries and benefits, or it's enough to buy books for the entire district," he said.

James Maze, the superintendent of the Crystal City district, said the ridiculous thing about the suit is that if Festus wins, it will lose a comparable amount of state aid.

Under Missouri's school-funding system, wealthier districts receive less money from the state, and the Festus district would have a higher valuation if it included the land with the Wal-Mart.

Whatever they gain "will be lost by a deduction in state revenue," Mr. Maze said. The same would not be true for the Crystal City district, he said, which is considered a "hold harmless" district.

Mr. Taylor confirmed that his district would receive fewer state dollars if it wins the suit.

But a deduction in state aid would apply only to funds for operating costs, or to about 40 cents of every dollar, Mr. Taylor said. About 60 cents of every dollar would go toward debt service, which does not get figured in the state formula.

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