Rapidly rising home values are shifting the property tax burden to residences as slow growth in other real estate diminishes the effect of rollbacks under the Hancock Amendment
BY: RUDI KELLER
Missouri Independent
The most popular idea for controlling property tax bills, the chairman of a Missouri House committee said Monday, is to set a separate tax rate for each of four types of property subject to the annual adjustments required in the state Constitution.
Since June, the Missouri House Special Interim Committee on Property Tax Reform has been holding hearings around the state and discussing legislation it could propose to quiet outrage over rapidly rising residential tax bills. One of the most popular ideas, said the chairman, Republican state Rep. Tim Taylor of Bunceton, is to “silo” the four types of property — agricultural, commercial, personal and residential — so increases in assessed value in one subclass are not diluted by stagnant values in another.
“If one spikes and the others don’t, it’s watered down, so (the rollback) doesn’t take effect,” Taylor said during a hearing Monday to discuss possible legislation. “So the goal is to get them in their own little category.”
Support for walling off the various classes of property is coming from officials, the public and the State Tax Commission, Taylor said to reporters after the meeting.
“Of all things that we discussed, not only is that coming from us, but from the people, and from the tax commission itself,” Taylor said. “That, in itself, can potentially fix a lot of issues that we’re seeing across the state.”’
The special committee was created in June after lawmakers passed a hastily crafted bill to cap tax bills in 97 counties. It follows several years of public upset over rapidly increasing assessments intended to bring taxable values in line with market values.
The speed at which the bill was written and passed is something that Taylor said has to be fixed. In 75 counties, tax bills are not allowed to increase more than 5% per year from a base amount, or by the rate of inflation, whichever is greater. The provision, Taylor said, was supposed to be whichever in less.
In 22 others, no increase in the tax 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.
Taylor told the committee he intends to have a bill drafted with nearly a dozen ideas that have been raised in the hearings or come from legislation in past years. House Speaker Jon Patterson wants the bill to be ready when the next regular session opens in January, he said.
Along with walling off subclasses of property, ideas that will be in Taylor’s bill include:
- Requiring all local tax elections to be on November ballots when turnout is highest.
- Allowing local governments to enact additional sales taxes to replace or reduce property taxes.
- Making debt levies subject to the Constitution’s rollback provisions.
- Wording ballot descriptions so the impact of new or renewed tax levies is stated as the cost per $100,000 of assessed value instead of the cost per $100 of value, which is the current method.
Not every idea will be as popular as siloing property classes, Taylor said.
“It’s my responsibility to try to put something together,” he said. “And again, the speaker said, ‘I’d like a big, beautiful bill,’ so we’ll see what we can do.”
The committee’s ranking Democrat, state Rep. Kathy Steinhoff of Columbia, also had a list of ideas she had crafted with input from other Democrats on the committee. Her list calls for homebuyers to file statements of the price of their new property — called a certificate of value — with assessors when homes change hands.
That idea did not make Taylor’s list. There are things Democrats on the committee would like to see but haven’t had a chance to discuss, Steinhoff added.
“There’s other things that we’re very interested in, but we don’t think we’ve really hashed out in committee a clear understanding of it,” she said.
The biggest portion of any property tax bill is the levy for local schools. At the same time the committee is studying property taxes, a separate commission — the School Funding Modernization Task Force — has been meeting to decide on how state support should supplement local tax revenue.
Part of Monday’s hearing was set aside to hear from state Sen. Rusty Black, a Chillicothe Republican who is chairing the school funding panel. He said his task force will be watching closely so its report, due in December 2026, is based on the tax base available at the time.
“The two decisions intertwine,” Black said. “Watching what comes out of here and what kind of things start to have some traction is going to be very important as the task force continues to meet, and possibly come up with a plan to give to the governor.”
The idea of siloing the types of property is growing in popularity because of the way taxes are adjusted after the biennial reassessment. Commercial and agricultural property taxes are tied to productivity and potential to produce income, while the values of homes and vehicles are tied to the price the property would bring in the market.Under the Missouri Constitution’s Hancock Amendment, when the value of property in a taxing district grows faster than inflation, rates are supposed to be reduced. But when one class of property is increasing faster than others, the effect is a smaller rollback than if the class of property had its own rate.
While the idea of siloing property classes is popular, there is little consensus among the committee’s 20 members on other changes that should be made, Taylor said.
“If you could get 20 people to all agree on any one thing,” Taylor said, “it would be a miracle.”