Missouri lawmakers seek limits on property taxes

JEFFERSON CITY, Mo. -- A group of Republican lawmakers proposed this week to limit increases in property tax assessments as a way to give relief to Missouri homeowners.

Their legislation would prohibit the assessed value of homes from rising by more than 2 percent or the rate of inflation, whichever is less.

The bill also would allow homeowners to hire private appraisers to assess their homes if they do not agree with the county assessor's appraisal. Taxes would be based off the private appraisal if the homeowner so chooses.

Supporters say astronomical property tax bills are forcing people from their homes.

"Escalating property assessments and taxes, if not controlled, can turn that dream into a nightmare," said sponsoring Sen. Jane Cunningham, R-Chesterfield.

Missouri has more than 2,700 entities that levy property taxes, including school districts, cities, counties, fire and ambulance districts, libraries, public hospitals and others. Property owners pay taxes to each of those based on the assessed value of their homes, buildings or land.

The bill would only affect residential assessments, not agricultural or commercial property.

Critics, including school districts, argue the legislation would severely decrease tax revenue during a time of rising costs.

Brent Gahn, spokesman for the Missouri School Boards' Association, said the bill would create "very, very serious budget problems for districts."

"As long as we're reliant on property taxes for a significant part of our school funding, school districts must be able to benefit from that source," he said.

Cunningham said school districts and other entities would still get a 2 percent increase and could request a tax increase by a vote of the people.

Under the bill, the biennial increase in the assessed value of homes would be capped until the homes are sold, when reassessments then could result in larger increases. Assessments could remain capped if homes are passed on to a child or grandchild. Homeowners age 55 and older also could retain a property assessment cap when buying and selling homes.

Cunningham said the legislation also is intended to allow homeowners to make improvements without increasing the assessed value of their homes.

The bill would not take effect unless voters approve a corresponding constitutional amendment, which would have to be referred to the ballot by lawmakers.

Last year, lawmakers passed a bill requiring local government entities to reduce their tax rates when assessed property values rise significantly.

Last year's measure also gives homeowners greater warning of impending tax hikes, allowing more time to either appeal or save money to pay the bill. County assessors must provide people notices by June 15 of increased property values and the projected taxes they will owe. That requirement begins this year for large counties but not until 2011 for smaller ones.