Update (July 28, 2023): HJR 14 and SJR 39 did not pass the Missouri General Assembly. On July 7, Gov. Mike Parson signed SB 190, which is intended to freeze property tax hikes for Missourians 65 and older.

With costs rising across the board, Missouri lawmakers are considering proposals to bring property tax exemptions for those at retirement age, as part of an effort to provide economic relief to people with fixed or low incomes. 

After passing a plan in 2022 to reduce the state’s personal income tax, lawmakers are considering further cuts in this year’s legislative session. Some plans would involve tax assessment freezes for low-income homeowners, while others would eliminate taxes on groceries or provide cuts to Missouri’s energy providers. 

The House Ways and Means Committee heard testimony this year on a pair of bills that would “freeze” real property tax assessments so that the value of the home would not increase after the homeowner reaches age 70. A similar bill was carried by Sen. Ben Brown, R-Washington, in the upper chamber. Neither measure passed the legislature, but Gov. Mike Parson signed SB 190, which is intended to freeze property tax hikes for Missourians over 65. 

Because of the Hancock Amendment, which requires voter approval for significant changes to the state’s tax code, the provisions under consideration would need to go on a statewide ballot  before they are put into effect. If the bills are passed this year, they’d likely go into effect by the 2025 tax cycle, pending voter approval. 

More than 1 million Missourians are 65 or older, accounting for almost 18% of the state’s total population, according to census data. Almost 100,000 people in that age group are living at or below the poverty line. 

Is Missouri getting rid of personal property tax?

Legislation to provide some sort of relief to older Missourians is being carried by Republicans, but has bipartisan support. In 2022, Kansas City Sen. Barbara Washington, a Democrat, introduced a similar bill that would exempt those 65 and older from paying real and personal property taxes. 

Rep. Jim Kalberloh, R-Lowry City, introduced a bill this session, HJR 17, and said it was a way the Republican caucus could cut taxes for some of the state’s residents who are on fixed incomes. But while the plan has bipartisan support, Kalberloh said he was aware that the state’s counties would likely oppose his bill, given its potential impact on tax revenue.

“I understand the importance of property tax and what all that affects,” Kalberloh said during the hearing. “It’s not going to take any money away from them necessarily. It’s just that they’re not going to get any increases, maybe, that would come in future years.” 

He added, though, that he was especially concerned about longtime property owners who are seeing suburban growth drive up the values of their homes.  “In some cases, it’s literally pricing them out of their house just for their personal property tax,” Kalberloh said.

Homeowners across the state have been hit hard by rising assessment values on their homes and land. In the heart of Kansas City, residents are taking the rising cost of property taxes — and Jackson County’s controversial assessment methods — into their own hands. 

How Kansas City is trying to tackle rising real property taxes

The Kansas City Council in September approved a plan to try and reduce costs in the Westside neighborhood, which was hit hard by property tax increases from 2018 to 2020. According to data announced at the time, homes’ assessed values rose 128% on average, compared to 18% countywide during that time. 

So far over 130 homes have signed up to participate in the deal. It enables households making less than 27% of the city’s median income — around $15,000 — to pay taxes only on their land for 10 years. For the next 15 years, homeowners would pay about 2.65% of their annual income, which is what the Westside Neighborhood Association says the average Jackson County resident pays in real property taxes.

Grassroots support for tax exemptions in Missouri

In Jefferson City, attempts to provide property tax relief have the support of a grassroots organization called MO Tax Relief Now. Republican Rep. Ben Keathley of Chesterfield sits on the group’s board of directors and is carrying legislation on behalf of the group that is similar to Kalberloh’s. Witnesses also testified on behalf of another conservative group, Freedom Principle of Missouri. In all, 33 witnesses testified in support of Keathley’s measure, HJR 45. 

Witnesses from the Missouri Association of Counties have already raised concerns about the impact of property tax relief bills on county budgets. 

Dennis Ganahl of MO Tax Relief Now said in an interview that Missouri’s policies are growing more unfriendly toward seniors in the state.

“Does Missouri value seniors or not?” he said. “There are states like Florida, Tennessee, Arkansas, Alabama, Texas, they value seniors. They help their seniors.  Missouri’s only one of 14 states that tax Social Security. And so we think it’s time to make a statement.” 

Who qualifies for Missouri circuit breaker?

Missouri already has a circuit breaker program that allows those under a certain income level to have property tax assessments frozen. The income level was raised to $27,000 in 2008, but Ganahl thinks the legislature should go further this year, something lawmakers are considering. 

“Hey, raise the salaries on circuit breakers,” Ganahl said.  “A person should be able to receive a circuit breaker and have their property value assessment frozen.” 

He added: “$27,000 a year does not get you very far.” 

According to the Missouri Budget Project, a progressive public policy think tank, nearly 14,000 homeowners in Jackson County applied for a circuit breaker tax credit, amounting to nearly $9 million in savings, with an average saving of $632. In Clay County, 3,285 homeowners received a credit; 1,507 in Cass County and 818 in Platte County. 

In the committee hearing for two of the bills, HJRs 15 and 17, Rep. Tony Lovasco, R-O’Fallon, said he thinks the legislature should look at plans that would provide property tax relief to more groups of Missourians than just older people.

He pointed to the opposition from counties across the state, which rely on property taxes to fund schools and public services. 

“I don’t see any scenario in which political subdivisions will not just respond by asking the voters to approve a tax increase levy on everybody else,” Lovasco said. “Because they’re not going to take that little cut in revenue, however small it may be.” 

He added: “I don’t think it’s a lot of money. I don’t think this is going to cripple anybody. But my experience, generally speaking, is that the government doesn’t like to be made smaller, even if it is what everyone else wants.”