The Special Interim Committee on Property Tax Reform met for about two hours on Monday in Jefferson City, after holding more than a half dozen meetings in recent months throughout Missouri to make possible changes to the state’s local property tax system.
According to Rep. Tim Taylor (R-Bunceton), committee chair, the goal of the committee is to work together to find common-sense reforms and solutions that protect homeowners, promote economic stability, and ensure accountability to benefit all citizens of the state.
Ten members of the 20-member committee opened the meeting at 11:05 a.m. Rep. Taylor invited Sen. Rusty Black (R-Chillicothe) to educate the committee on what the Missouri School Funding Modernization Task Force is reviewing regarding the Foundation Formula for schools. Sen. Black is the task force chairman.
Sen. Black said the percentage of local taxes to fund schools in the state starts below 20 percent in some counties, while there are school districts in Missouri that reach 91 percent of the district’s funding from local funds. He said his Senate district in northwest Missouri has 76 school districts with 32 percent the low and 76 percent the high of local tax funding for those districts.
He said the task force is studying the school funding formula, which was last altered by the state in 2012, noting that any property tax changes made could have an impact on school funding.
Rep. Jim Murphy (R-St. Louis) said there are winners and losers in changes to the formula. The formula determines who needs help and who doesn’t. It’s to give every student an equal opportunity, not the districts, he said. “This isn’t about school districts. It’s about kids,” he said.
Sen. Black said as the task force moves forward, any plan or plans won’t be presented to Governor Mike Kehoe until the end of 2026. He said models are being reviewed in other states where some funding from certain districts are moved to other districts. There has also been discussion about combining some school districts with others.
Otto Fajen of the Missouri National Education Association was asked to come forward as he worked on the Foundation Formula in the 1990s when he was a Senate staff member.
Sen. Black said as the committee comes up with recommendations for property taxes, it’s important for the task force to understand how they will affect its recommendations.
Rep. Kathy Steinhoff (D-Columbia) asked Sen. Black if the task force was looking at what types of school buildings could be built or what classes students take, along with online teaching and career technical education. Not formally, Sen. Black said. Those topics have shown up and there have been some discussions, he said.
Rep. Rodger Reedy (R-Windsor) said schools in his area are required to go to a $2.75 operating levy, while some schools in his district were operating successfully with a $1.50 operating levy. Rep. Reedy wondered if the $2.75 needs to be reset. Otto Fajen said he thinks the operating levy can be rolled back; that $2.75 is not required. But he will check, he said.
During the early part of the meeting, Rep. Taylor submitted a list to the property tax committee members of items that have been discussed, and which could be considered in a bill to be drafted and introduced in the next legislative session. He also noted individual representatives will likely introduce legislation on these or other tax issues. At the next committee meeting, likely in early December, a bill draft will be available for discussion, Rep. Taylor said.
Among the topics listed are tax rollback positions; quarterly payment schedules on property taxes; local control of property taxes on school funding in rural areas; new construction should benefit taxpayers, not taxing districts; property tax increases in terms of hundred thousands of dollars, not hundreds of dollars; districts shall not advertise ballot measures as “no tax increases;” Airbnb, nursing home and commercial property taxes; replacement costs of improvements and how that affects property values; property tax and sales tax issues should be on the November ballots; five percent property tax caps in some counties; some counties only applying freezes to some levies; prevent COVID spike from happening again; blind pension fund to be removed and turned into a line item in the state budget; need to change the name of the State Tax Commission to the State Assessment Commission. Other topics were listed which likely will be in the draft bill.
Rep. Taylor said, “this committee is not here to defund anyone,” but to reform personal property taxes.
Rep. Steinhoff said Democrats on the committee have also put together topics which will be considered, including the issue of assessors’ certificate of value of housing properties.
A few other possible topics for the committee to consider include:
Rep. Murphy said he has been looking at reserve funds of school districts. “We might want to look at what the minimum and maximum should be for such reserve funds,” he said.
Rep. Dean Van Schoiack (R-Savannah) suggested the State Tax Commission should be expanded from three members to seven members, and those people on the Commission should have backgrounds in property appraisal and assessment, not politics.
Rep. Del Taylor (D-St. Louis) suggested “Hancock rollbacks,” and said by informing counties that such rollbacks are available might be a viable path for taxpayer relief. He said St. Louis County conducts such rollbacks.
Rep. Reedy said county assessors have indicated to him the need to make assessments clear and what a physical inspection of property is. “There are areas where going into property are not safe,” he noted. Rep. Reedy also is pushing for limiting assessments to no more than 100 percent. “We need to protect our taxpayers and our assessors,” he said.
Gary Romine, chairman of the State Tax Commission, addressed the committee and said only Dent County (105 percent) is over 100 percent in the state. It’s a standard rule by the Commission, he said, and legislation would be needed to change the 110 percent measure or a rule would be required through the Joint Committee on Administrative Rules.
Rep. Will Jobe (D-Independence) said he would be concerned about putting numbers into statute. “It’s supposed to be true value of money at the given time; true market value,” he said.
Rep. Tricia Byrnes (R-Wentzville) noted that her taxes went up 60 percent during the past 10 years. She said she is opposed to the state needing to police county tax levels.
Commissioner Romine said market value is the important tool. Each county is measured on their own data, he said.
Rep. Reedy also said Board of Equalization hearings are not getting done in a timely way, and that tax appeals should be heard promptly.
Training of county tax assessors was also mentioned, and Romine said if there is any specific issue that’s not being satisfied, let him know about it. Recently the State Tax Commission sponsored a training session for assessors. “We do have ongoing education. Part of the Commission’s job is to help train. We want to continue to do that. We update the assessors’ manual every year,” he said. He also noted that Section 137.115, RSMo., includes a descriptive way of assessors’ physical inspection of property.
Another topic of interest is an ombudsman position under the State Tax Commission, a position called for by statute, but Romine said funds are needed in the next state budget to fill the position. Rep. Taylor said an ombudsman is needed to educate the public about tax issues for their understanding.
The meeting adjourned at 1:15 p.m.