Questions about the constitutionality of a property tax cap included in the governor’s stadium funding plan earlier this month may draw Missouri lawmakers back into session later this year.
House Speaker Jon Patterson, a Lee’s Summit Republican, on Monday formed the Special Interim Committee on Property Tax Reform and empowered it to study Missouri’s property tax system and recommend “solutions to ensure fairness, transparency and sustainability for taxpayers and municipalities across the state.”
The committee’s formation comes on the heels of Patterson floating the idea of a special legislative session in September, when lawmakers are already required to consider whether to override gubernatorial vetoes.
“You go around to any of the counties… and they’re bringing up property taxes,” Patterson said earlier this month. “This is a huge problem. I would say it goes to crisis levels.”
Property taxes are the main source of revenue for local governments, funding schools, public safety and other functions. Rising housing costs, coupled with property reassessments, have put the way the taxes are calculated under the microscope, with lawmakers looking to provide relief to taxpayers without bankrupting local governments.
The topic even emerged as part of discussion over the state’s public school funding formula. A state task force created to study Missouri’s education spending spent its latest hearing this week focused on how property taxes have contributed funding inequities.
When Gov. Mike Kehoe called lawmakers back into session earlier this month to consider a $1.5 billion incentive package for professional sports stadiums in Kansas City, he agreed to allow an amendment requiring most counties to put a hard cap on increases in property tax bills.
In 75 counties, tax bills would not increase more than 5% per year from a base amount, or the rate of inflation, whichever is less. In 22 others, no increase in the basic bill would be allowed. There are exceptions built in for newly voted levies and the additional value from improvements.
Many of the larger counties of the state, including Boone, Greene, Jackson, St. Louis County and the city of St. Louis, were excluded altogether from the legislation.
The property tax amendment caused a fissure among conservatives in the Missouri Senate. Some supported the measure in an attempt to win tax relief concessions during the special session. Others decried it as an unconstitutional bait and switch designed to fool taxpayers, pointing to a requirement in the Missouri Constitution that property taxes be “uniform upon the same class or subclass of subjects.”
Even Patterson, who voted in support of the bill that included stadium funding and the property tax cap, acknowledged questions about whether it could survive a constitutional challenge.
“One thing I don’t do is guess what is going to happen in our courts,” Patterson said. “I’ve heard from a lot of attorneys that say it absolutely is. I’ve heard from some that said that it isn’t. I do think it’s constitutional.”
The interim committee created by Patterson will hold seven hearings across the state this summer to gather input and explore legislative solutions. State Rep. Tim Taylor, a Republican from Bunceton, will serve as chairman.
State Rep. Kathy Steinhoff, a Columbia Democrat, will serve as the ranking minority member.
“Property taxes are one of the most common concerns we hear from Missourians,” Taylor said, “and it’s clear that our system needs a closer look.”
