One Missouri businessman’s question could lead to a 50% county tax cut

(The Center Square) – Voters in Laclede County will decide on lowering its commercial property tax rate in November because a businessman came to a County Commissioners meeting with a question about his bill.

“He had commercial property in counties surrounding Laclede and he observed the difference in the surtax,” Laclede County Commissioner Randy Angst said in an interview with The Center Square. “Frankly, he didn’t know what the surtax was and he started surveying other commercial property owners.”

The inquiry led to the commission reviewing its tax rate along with rates in the surrounding counties. On Nov. 8, voters in Laclede County will decide whether to reduce the tax from $1.03 to 51 cents per $100 assessed valuation on all utility, industrial, commercial, railroad and other property that’s not residential or agricultural.

In Clay County, voters will decide to reduce the tax from $1.59 to $1.44 to per $100 assessed valuation on all utility, industrial, commercial railroad and other property that’s not residential or agricultural.

Unlike other property taxes, the commercial surtax doesn’t adjust downward as assessment values increase. It can’t be lowered by elected officials – only by a vote of the people. The rates were set in 1985 and replaced a tax based on business inventories on Dec. 31.

“We began a conversation in the discovery phase as to what our rate is compared to others,” Angst said. “We looked at the history of the tax and asked what would be the benefit of lowering the surtax and how would it impact the recipients? Then, what should that rate be?”

The Show-Me Institute compiled a graphic showing the tax rate for all of Missouri’s counties. Currently, Laclede County has the 14th-highest rate of Missouri’s 114 counties, and it would be 44th if the initiative passes. The tax rates in the six counties surrounding Laclede range from 3 cents (Camden) to 68 cents (Wright and Texas.)

Angst said the reduction would be fair to all businesses and not a special cut favoring a sector.

“The reduction or adjustment would be spread over the entire sector of the economy, from the barber shop or boutique to the largest manufacturer,” Angst said. “You’re not singling out just one business. So it comes back to an economic development question when we have tens of thousands of dollars of tax abatements on the books.”

The Lebanon R-3 School Board and the Lebanon City council passed resolutions against the initiative. The school district’s resolution said its budget revenue would be reduced by $275,000 in the first year and at an increasing rate each year thereafter. The resolution said the surtax produced approximately $950,000 in January and was distributed to the library, health department, developmental disability services, road districts and county municipalities in addition to the schools.

“This will still raise a lot of money for Laclede County,” said David Stokes, the director of municipal policy for the Show-Me Institute. “I think it’s great they’re putting it before the voters. It’s not my place to tell the voters what they should do, but I think it will make the counties more economically competitive and do it without any special tax deals.”

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