Bill would give more Missouri seniors, disabled increased property tax relief

(The Center Square) – Legislators are attempting to rewire Missouri’s “circuit breaker” program to provide more relief from property tax increases for certain senior citizens and people who are disabled.

Currently, the disabled and qualifying seniors can get a tax credit for a portion of the annual real estate taxes they pay. For renters, the maximum credit is $750 and homeowners can get $1,100. The credit is calculated by the amount of real estate taxes or rent paid and total household income.

Rep. Brad Hudson, R-Cape Fair, is sponsoring a bill to change the minimum and maximum total household incomes for the tax credit. The bill automatically increases future levels by tying them to the consumer price index (CPI). House Bill 2200 increases the minimum and maximum income levels by $7,000 – from $14,300 to $21,300 for the minimum and from $30,000 to $37,000 for the maximum.

A fiscal analysis by the Missouri’s Office of Administration-Budget and Planning stated the increase to the upper maximum limit will allow more higher-income homeowners to qualify for the tax credit. More lower-income individuals will qualify for the maximum $1,000 tax credit if the minimum limit is raised. If a homeowners’ income is higher than the minimum and lower than the maximum, it triggers a formula for calculating the tax credit.

“We have a program that allows individuals with too much of their income going to property taxes to get some relief,” Hudson told the House Ways and Means Committee on Feb. 16. “When you maintain a home, the values increase when the assessments are performed and they often don’t go down. If you reach a certain age in life where you’re on a fixed income or something happens and you’re 100% disabled, it affects your ability to increase income. (Income) can change the amount of other taxes you pay, however property taxes are a different animal.”

Hudson, a former assessor for Stone County, emphasized the bill doesn’t change the property taxes owed to local jurisdictions. The law’s minimum and maximum levels were last updated in 2008. Hudson’s bill ties future income levels to inflation (CPI) for all urban consumers for the Midwest region as determined by the U.S. Department of Labor.

“We all know the purchasing power of a dollar is not the same today as it was a couple of years ago,” Hudson said. “What I’m trying to do is make a real simple change here. But in this building, sometimes we think something is simple and it ends up being more complicated.”

If the bill is passed, it would become effective during the tax year beginning Jan. 1, 2022.

The bill’s fiscal note predicts the bill would reduce Missouri’s general revenue by $43.4 million during fiscal year 2023. Because the bill would be effective on the calendar year instead of the tax year, the Office of Administration stated qualified participants could file for the tax credit on or after Jan. 1, 2022, regardless of the tax year associated with the claim. It also stated most tax credit claims occur between January and April. The estimated impact on general revenue will be $23.7 million in fiscal year 2024 and $25.4 million in 2025.

Committee members Rep. Ashley Bland Manlove, D-Kansas City, and Rep. Barbara Phifer, D-St. Louis, both made comments in support of the bill.

“This is something that just makes all the sense in the world,” Phifer said. “As far as I’m concerned, if this is up and going I would like to tweak it where more folks could qualify.”

No one testified against the bill.

“We have worked with many legislators on different ways to deal with this issue,” Jay Hardenbrook, associate state director for advocacy of AARP, said during testimony in favor. “Sometimes, you come back to the simplest way to do this and that’s what Rep. Hudson has done. He basically took the homeowner section of the circuit breaker or the property tax credit and increased the minimum and maximum. It makes sense, especially leading into reassessments next year.”

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