As the Missouri House began the final day of this year’s session last week, state Rep. Tim Taylor reluctantly reported that last-minute efforts to salvage a package of changes to property tax laws had failed.
For most of the past year, property taxes and how they are levied had dominated the three-term Republican’s legislative work. The change he considered key to making the system fairer had died weeks earlier in disagreements between the House and Senate.
Now he was telling the House that smaller changes, intended to make voters more informed and change how local tax measures are labeled, were also dead.
He chose a quote from the renowned Russian writer Leo Tolstoy’s 1886 book “What Then Must We Do” to illustrate what happened.
“I sit on a man’s back, choking him, and making him carry me, and I assure myself and I assure others, that I feel sorry for the man,” Taylor recited. “And I wish to ease his lot by any possible means —- except to get off his back.”
The local districts that rely on property taxes were too powerful a lobby to overcome, Taylor told his colleagues.
As they campaign, Taylor said, members will go out and tell constituents, ‘‘I really, really feel sorry for you” as they complain about property assessments that are driving up their tax bills.
“But you come to this building and you say ‘sorry, I can’t vote against my schools. By God, they need everything they can get’,” Taylor said. “Then you’re not taking into account the taxpayer…and you’re making them suffer so that you can sit there and not suffer at all.”
The problem
In 1980, Missourians approved a constitutional amendment intended to control local tax rates by making increases subject to a public vote and requiring annual rate adjustments, or rollbacks, when property values rise faster than inflation.
But the rollback requirement is a restraint on total revenue for each taxing district, not a cap on individual tax bills. There are five subclasses of property — residential, commercial, agricultural, personal and state-assessed private infrastructure — and when values in one subclass rise faster than others, the burden shifts toward those owners.
And for the past 10 years, the bulk of that shift has been toward homeowners. Total residential assessments have increased 75% since 2015, according to annual reports of the Missouri State Tax Commission. In the same period, commercial and personal property assessments have risen about 50% and agricultural land values have risen 14%.
Throughout Missouri, except in St. Louis County and the city of Gladstone, tax rates are general. All property, regardless of subclass, is taxed at the same locally determined rates.
In St. Louis County, taxing districts look at the revenue from each subclass as a separate question. If values within that subclass rise faster than inflation, tax rates are lowered in that class only.
Called siloing, the result has meant residential property owners in St. Louis County pay a much lower rate than owners in other subclasses.
Both chambers passed bills to require siloed rates statewide. Taylor’s House-passed bill never got out of a Senate committee, while a bill passed in the Senate two weeks before the end of the session never received a House hearing.
The lack of action is frustrating, said state Sen. Joe Nicola, a Republican from Grain Valley in Jackson County.
In 2019, assessments for some homeowners in Jackson County increased 400%. The assessments increased by one-third more in 2023, prompting an intervention by the State Tax Commission and a lawsuit, eventually dismissed, by then-Attorney General Andrew Bailey, to reverse the increases.
Riding the outrage over rapidly increasing tax bills, state Sen. Joe Nicola, a Grain Valley Republican, promised he would push for changes to provide relief. But he’s been stymied at every step, he said as the session wound down.
“Before we came into session, our caucus had a meeting, a summer caucus, and the No. 1 priority was property tax reform,” Nicola said. “We don’t have anything that’s actually going to help the people save money.”
The impasse
When property classes are considered in isolation, Taylor said in an interview with The Independent, owners get realistic market valuations for their property without fearing massive increases in the tax bill based on that value.
When all property is considered in setting rates, the relief from a rollback is diluted. For example, in Hamilton in Caldwell County, assessments for commercial property doubled or tripled but the rollbacks reduced rates by only a few cents per $100 of assessed value.
One property owner saw a 200% increase in value and the tax bill increased 197%.
The irreconcilable difference between the House and Senate approaches to siloing rates is what happens to rates of subclasses that do not qualify for a rollback. The Senate version, Taylor said, would have allowed taxing districts to increase rates for some property owners while reducing them for others to capture all the constitutionally allowable revenue.
“If there’s a loss, they can make that up and tack that on to another silo,” Taylor said.
That’s the way taxes are levied in St. Louis County, he said, and the shift is generally onto commercial property.
“In Howard County, there’s no commercial property,” Taylor said. “It’s all going to land in one place, because we’re not going to put it on ag land. It’s going right on the doorstep of the homeowners.”
Another provision that was unacceptable would have set up a fund to assist school districts with construction costs for academic buildings, Taylor said.
It would have allowed lawmakers to appropriate general revenue to the fund and would have set up a commission to oversee how it was used.
“We’ve never, ever seen anything like that on this side of the House,” Taylor said. “So I would have to strip that out. And I guarantee it, it’s not going to pass here.”
Smaller steps
The demise of siloing as a solution put the focus on other, more incremental changes.
Attention turned to legislation on how the tax commission determines which locations are in compliance and which are not.
Local property valuations are monitored by the tax commission, which publishes a study of each county and can direct assessors to raise residential or commercial values it considers too low.
One idea would have lowered the range of values used in the studies from 90% to 110% of market value to 80% to 100%.
Other ideas related to the way assessors set values.
Currently, assessors are not supposed to increase the value of a residential property by more than 15% without an in-person exterior inspection.
Nicola wanted the 15% limit to be a cap on any assessment increases for residences.
“We need to get some relief on the property taxes so people can stay in their home,” he said.
The bill that Taylor lamented in his speech to the House would have made as many changes in how tax questions appear on the ballot as it did to the way rates are set.
Instead of names like “Van-Far RI Proposition Safe Schools, Strong Community” or “Community R-VI Proposition K.I.D.S.”, two ballot names used in Audrain County in April, each ballot measure would have a letter or number designation.
The ballots would have had to describe the tax rates before and after the vote, and would have been barred from using the phrase “no tax increase” unless taxes would go up after a negative vote.
The cost to individual taxpayers would have to be described in terms of taxes for every $100,000 of appraised value for real estate and every $10,000 of appraised value for personal property.
On tax rates, the bill had provisions that could allow them to increase. If property values fell in the year after an election to increase rates, the lost revenue could be calculated into the actual rate that could be charged.
For tax relief, the bill allowed the minimum school levy, currently $2.75 per $100 of assessed value, to be subject to rollbacks under the Hancock Amendment.
Nicola voted against the measure on this year’s ballot allowing lawmakers to replace the income tax with an expanded sales tax. He said during debate that no constituent had asked for it while most people he spoke with urged action on property taxes.
“The governor wants to phase out income taxes so he can draw businesses,” Nicola said. “But that’s not the only thing businesses look at. They look at education, they look at affordability of homes, schools. We have people moving out of Jackson County who can’t wait to get out of that county because of the property taxes.”
The work this year will resume in 2027, Taylor said, when the House will have 51 new members and the state Senate will have 11.
“I’ve been saying since we began, at probably the very first meeting we had back in July, or whatever it was, that this is not a one-year thing,” Taylor said. “We’ve taken 40 years or better to get where we are today and so it’s not going to be changing overnight.”
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