Gov. Matt Blunt on Tuesday signed into law legislation that makes sweeping changes in Missouri’s property tax system while boosting subsidies for elderly and disabled homeowners.
The measure contains something for everybody who owns a home: The subsidy for low-income seniors and people with disabilities increases from $750 to $1,100. More middle-class seniors, including those with incomes of up to $77,323, can get help paying large property tax increases.
And all landowners get protection from giant leaps in property taxes caused by rising property values.
The heart of the bill is a requirement that nearly all taxing jurisdictions roll back their tax rates to keep total taxes level when property values rise. Any increase in total tax revenue beyond the rate of inflation and revenue resulting from new construction would have to be approved by voters.
The rollback requirement, however, would not apply to the Kansas City or St. Louis school districts because the state constitution allows them to maintain a minimum tax rate.
The bill also requires local officials to notify property owners of their projected tax bill by June 15 of any year when property values have been reassessed. The notification requirement takes effect next year in Jackson, St. Louis and St. Charles counties and the city of St. Louis. Other counties must adopt the early notification beginning in 2011.
The bill’s sponsor, Senate leader Michael Gibbons of St. Louis County, said the measure would largely end the sticker shock that many homeowners receive when they get their tax bills in November. It also would stop what he called back-door tax increases that result when school districts or local governments apply existing tax rates to higher assessed values, he said.
“It allows us to protect taxpayers by ending tax increases caused by reassessments, closing tax increase loopholes, requiring earlier notice and more information, and expanding tax relief for seniors and the disabled,” Gibbons said in a statement.
Blunt held ceremonial signings in several cities throughout the state. He called the bill one of the most significant legislative achievements of the year.
Critics have warned that the law could cause school districts or local governments that are not at their maximum rates to boost their tax rates this year to avoid locking in their current low rates.
Supporters said governments can still raise their rates as long as voters approve.