No one disputes the necessary evil of taxes to fund vital public services that range from fire and police protection, to water and sewer service, to funding schools to educate the next generation. Tax paying citizens deserve that our local political subdivisions do their level best to be stewards of these tax dollars making sure that each dollar that is collected is spent wisely and the greatest value possible is received in return. A system of equitable taxation, open books, and accountability are essential for good and sound government.
It is difficult to find a region in our great state, especially in the suburban areas, where property owners are not struggling to meet the financial burden that results from the ever-increasing property values and the corresponding increase their property tax burden. In some counties in Missouri, assessed values increased by an average of 22% between 2005 and 2007. Such increases touch every family, but its harshest impact is felt by those on fixed incomes.
To add insult to injury, our assessed valuations trail the home market resulting in valuations that may not accurately reflect the market price of a home. While Missouri is feeling the pinch of dropping median home prices, we are much better off than some parts of the country. Property taxes remain a local issue, but these striking increases call for action at the state level and property tax reform is a top priority this session.
The Missouri Senate has passed a bill that mandates tax rate rollbacks by all political subdivisions in reassessment years (SB711). These rollbacks are intended to protect property owners from sharp tax rate increases and prevent windfall revenues by taxing entities in reassessment years.
The bill also allows the ability for taxpayers to pay their property taxes in installments to prevent the “shock” of lump sum tax payments at year-end during the holiday season. Current law already allows counties to opt for quarterly installments, so this bill will require counties to provide taxpayers an estimate of their tax liability in the spring.
Citizens should never be liable for the errors of government, but in Clay County citizens are held liable for penalties and interest even when an error is made by the county. Unfortunately, our county collector will not make any exceptions and citizens are not prone to go to court, or are unaware of that alternative to prove their innocence. In either case, the taxpayer should not have to bear the burden of legal fees and the hassle of a lawsuit, because the county is unwilling to admit fault and waive the penalties and interest. This bill, and a companion House bill (HB1958) which I have co-sponsored, prohibits the imposition of penalties and interest where there is clear and convincing evidence that a county made an error in the determination of taxes owed by a taxpayer.
The Missouri House is considering an increase in the income cap for property tax relief known as the circuit breaker (HB1321). The program is currently available to seniors and disabled individuals who make $27,500. This bill would raise the cap to $32,500 for a single person and $36,500 for a married couple while increasing the maximum tax credit from $750 to $800.
Another bill under consideration by the House (HJR59) is a constitutional amendment exempting Missouri citizens on active military duty from paying personal property taxes.
Property tax reform is a very complex issue. Radio-television personality Arthur Godfrey proclaimed, “I'm proud to be paying taxes in the United States. The only thing is - I could be just as proud for half the money.” The best humor is always rooted in truth. We should demand accountability in the usage of our tax dollars and we deserve an open and accurate assessment process that prevents government from taking advantage of them.