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Missouri’s senior property tax freeze still dogged by unanswered questions

Missouri lawmakers passed a law allowing counties to put a property tax freeze in place for seniors. But counties still have questions about how to put the freeze in place
Chase Castor
The Beacon
Missouri lawmakers passed a law allowing counties to put a property tax freeze in place for seniors. But counties still have questions about how to put the freeze in place

Missouri counties told state lawmakers that they needed more information when it comes to putting the freeze in place. Some revisions were made this year, but some lawmakers contend that it will take a third try to get the program right.

Last year, the Missouri General Assembly scrambled to act on an issue popular with voters who turn out in large numbers: property tax cuts for seniors in the form of a tax freeze.

Lawmakers passed a vague directive letting counties freeze property tax bills for seniors, without defining what “senior” meant, who was going to tell the counties how to define that group or how to pay for the change.

Now, feeling pressure from constituents, county expenses are piling up. And with the Statehouse functionally useless as senators eye upcoming elections, clear directions aren’t coming anytime soon.

“We have no idea what to expect,” said St. Charles County Commissioner Mike Elam. “We’re going down a road blindly, and we’re trying to make the best-educated guesses that we can.”

The biggest Missouri counties with the most dollars to spare are spearheading the change. But with more questions than answers, small counties are waiting to learn from the larger population centers.

In line with national trends, Missouri’s population is skewing older. Estimates from the U.S. Census Bureau found that by 2030, more than 25% of Missouri’s population will be over 60. Senior citizens in Missouri are expected to increase 87% from 2000 to 2030.

Data compiled by the Missouri Census Data Center found that 7% of senior households in Missouri fell into the “cost-burdened” category from 2012 to 2016, meaning they spent 30% or more of their gross income on housing.

How much progress have counties made?

All of Missouri’s largest counties have passed ordinances that will eventually freeze real property tax bills for Missourians over 62.

Without clear direction from lawmakers in Jefferson City, some versions look different than others. Counties will ask residents to apply again on a yearly basis, but a few details on that application process will be streamlined.

Jackson County is accepting applications for the program. Officials included a home value cap of $550,000, so residents with home values over that figure won’t be eligible for the freeze. Taxes will freeze at the 2024 rate, with the first credits to be seen by residents in 2025. In Clay County, applications for the freeze will open in 2025.

St. Louis city and St. Louis County followed a similar model and added home value caps of $500,000 and $550,000, respectively. St. Louis County stated on its website that without additional funding to handle the lift of putting the freeze in place, the program won’t be available this year.

But under revisions to the law, which have yet to be finally passed in the General Assembly, adding home value caps would be prohibited.

A lawsuit recently filed against St. Louis County cited the delay in getting the program up and running. The director of the county revenue department asked the County Council for $1.8 million to hire full-time staff and to pay for equipment and software purchases.

St. Charles County was among the first to pass the freeze and estimates that about 38,000 households would qualify for the freeze. They’re doing their best to take a slow and steady approach, Elam said. Between the 2nd and 3rd congressional districts, about 32% of households will qualify, based on data from the Social Security Administration, he said.

“We don’t know how many of them are actually going to apply,” Elam said. “This program was started with very good intentions by state legislators. Practically speaking, it’s always different than it is on paper.”

Elam has no estimate for the cost of imposing the freeze. It’s unlikely that St. Charles County will follow St. Louis County’s lead by hiring full-time staff, though. Temporary additions to the collector’s and recorder’s offices seem like a better fit, he said.

Platte County plans to open applications for the program in September. It intentionally left home value caps off of their ordinance.

“It’s not in state statute,” said Commissioner Dagmar Wood, who is running for Platte County assessor. “We feel like we’re just opening up the county for a lawsuit. We’re going to mirror exactly whatever ends up coming out of Jefferson City.”

Wood estimates spending around $200,000 to put the program in place. The county has already hired a full-time staffer to help with the additional workload, she said, and it plans to spend from $50,000 to $100,000 sending out mailers to let residents know about the program.

That’s something St. Charles County is holding off on for now, Elam said. With so many questions left to answer, they’ll wait to incur large one-time costs until the provision is more clear. But they are thinking about how to get the word out to Missourians over 62 who may not be as digitally savvy.

“Unfortunately, the ones who really need this are probably the ones who are not paying as much attention and don’t understand the process,” Elam said.

How do schools and libraries feel?

Some counties appear hesitant to freeze property taxes for one group out of fear that would limit tax revenue for taxing districts that use property tax revenue, like school districts, libraries or fire departments.

Officials in Boone County were assessing the best way to approach the freeze. Voters gave their approval after it was placed on the April 2 ballot.

Columbia Public Schools estimated a freeze could cost anywhere from 10% to 20% of district revenue, the Columbia Missourian reported. The cost could range anywhere from $3 million to $6 million.

Harrisburg School District Superintendent Steve Combs said nearly one-third of the homes in his Boone County district are owned by residents who would be eligible for the freeze. The district could lose nearly $800,000 in the future.

Boone County Commissioner Kip Kendrick told the Missourian that as the county looked for examples from other states that made similar moves, many local school districts typically went on to ask voters to raise tax levies following the eventual revenue decline. He said that officials eventually may schedule the program for renewal to give them more flexibility to add tweaks in the future.

It’s something Wood is less worried about in Platte County, where the population is growing.

“Our assessment values have gone up, overall valuation on properties has gone up,” Wood said. “I don’t see how this is a negative to taxing districts, except maybe they’re not increasing as fast as they would like.”

Lawmakers expect more clarification next year

Even though members of the General Assembly knew they were heading into the 2024 legislative session under pressure to revise the law, lawmakers expect more revisions in coming years.

“I would recommend that we pass this and then come back with a fervor next year and fix whatever needs fixing,” Rep. Darin Chappell, a Rogersville Republican, said.

“And for those of us who are freshmen, let this be a lesson we’ll learn that maybe we ought to pay more attention before we actually pass bills that are improperly written in the first place,” Chappell said.

The revisions would bar homeowners from buying lower-valued property, locking in a lower tax rate and then making improvements to that property under the lower-valued rate. It would also require that anyone 62 or older who is behind on their taxes become current before they are eligible for the freeze.

In the House committee, lawmakers suggested requiring property owners to apply annually, which many counties have already included in their statute. Ultimately, they bypassed the change amid fears that the bill may get stalled in the stalemated Senate.

Elam said smaller counties are watching as more-resourced ones parse through the details. He said the state association of collectors and Missouri Association of Counties are working together to streamline the process, hopefully eliminating some of the administrative burden down the line.

Advocacy group MO Tax Relief Now says it is working with at least 40 counties to put a freeze in place. They estimate that the legislation could save Missourians upward of $500 millionif put in place statewide.

The revision bill is SB 756, sponsored by Parkville Republican Sen. Tony Luetkemeyer. 

This story was originally published by The Kansas City Beacon, a fellow member of the KC Media Collective.

Meg Cunningham is The Beacon’s Missouri Statehouse reporter.
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