HCS HB 591 -- PROPERTY TAXATION

SPONSOR:  Sutherland

COMMITTEE ACTION:  Voted "do pass" by the Committee on Ways and
Means by a vote of 8 to 3.

This substitute changes the laws regarding property taxation and
requires tax rate rollbacks by school districts in reassessment
years.  In its main provisions, the substitute:

(1)  Authorizes political subdivisions, for tax year 2009, to
levy a property tax rate sufficient to generate as much revenue
as was produced in the 2007 tax year, excluding new construction
and improvements, as long as the rate does not exceed the greater
of the rate in effect for the 1984 tax year or the most recent
voter-approved rate;

(2)  Changes the time line for the assessment, levy, and appeal
of property taxes for certain counties;

(3)  Allows school districts to levy an operating levy for school
purposes required for the current year, less any required
adjustments, if the rate does not exceed the highest tax rate in
effect after the 1980 tax year;

(4)  Changes the term base year for new homeowners who are
approved for the first time after satisfying the three-year
ownership requirement for the homestead preservation tax credit
so that the base year for the taxpayers will be the year
following the first year in which the taxpayer acquired ownership
of the homestead.  Currently, the homestead exemption limit for
the credit is based on the increase in tax liability from the
base year to the year prior to the application year for all
applications for credits filed between December 31, 2008, and
December 31, 2011;

(5)  Adds two alternate members to the St. Louis City Board of
Equalization and changes the date on which members must be
appointed from the second Monday in May to the first day of July;

(6)  Allows the City of St. Louis and all charter counties to
opt-out of the requirement that they must provide taxpayers with
notices of projected tax liability for the 2011 reassessment
year.  The effective date for all other counties for the
projected tax liability notice requirement is moved back to
January 1, 2013;

(7)  Requires assessors and collectors to submit estimates of
their costs to comply with the projected tax liability notice
requirement to the State Tax Commission; and

(8)  Authorizes voters to petition for an election to lower the
tax rate ceiling of a political subdivision when at least 33% of
the registered voters within the taxing authority's boundaries
sign the petition.  If at least 66% of the votes cast are in
favor of lowering the ceiling, the lowered tax rate ceiling will
become effective.  The petition to lower the tax rate ceiling
cannot include debt service levies.

The substitute contains an emergency clause.

FISCAL NOTE:  No impact on state funds in FY 2010, FY 2011, and
FY 2012.

PROPONENTS:  Supporters say that the bill gives taxpayers a voice
in the taxation process by providing a mechanism to file a
petition to put a referendum on the ballot to lower the property
tax rate.  The taxpayers of a district can then decide what
services they want to support such as schools, fire and police
departments, ambulance services, etc.  Taxpayers in local
jurisdictions feel powerless to make a significant impact on
their property tax rates.  The bill provides an opportunity to
make adjustments when taxpayers don't believe their elected
officials are listening.  In many cases, the people who are
setting these rates are not elected because they had no
opposition and no vote was required.  The bill sets a
sufficiently high threshold to guard against frivolous attempts
to roll back rates.

Testifying for the bill were Representative Sutherland; and
Americans for Prosperity and Foundation.

OPPONENTS:  Those who oppose the bill say that Missouri has about
5,000 political subdivisions with 1,000 as municipalities.  The
bill will allow a disgruntled taxpayer to get a petition signed,
voted on by the people, and easily passed.  Citizens have a voice
every April when half the board is up for election.  The current
system works.  Citizens need a school board that has the
confidence of the community because 70% of property tax revenue
goes to schools.  Missourians should never forget the
constitutional obligation to provide services to their public
school students.  Citizens already have the ability to lower tax
rates by elected boards.  It only takes four of the seven board
members to vote to reduce taxes.  All school districts are
required by law to have a tax rate hearing at which time patrons
may express their concern and request the board to lower the tax
rate.  Currently, 106 schools of the 523 in Missouri are levying
lower rates than required by law.  Many are very small.  It will
require effort and expense to defend a current levy.  A reduction
in the tax rate could be detrimental to a school district.  There
is no limit to the number of petitions or the amount of a rate
reduction.  The bill will make it impossible for school districts
to plan their budgets and offer consistent programs.  Schools
have long-term financial obligations.  The degree of uncertainty
will have a potentially devastating effect on school children and
their education.

Testifying against the bill were Missouri Municipal League;
Missouri National Education Association; Jason Hoffman, Missouri
Association of School Business Officials; Missouri School Boards
Association; and Cooperating School Districts of Greater St.
Louis.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:25 am