By: Paige Gerling, Columbia Missourian
If Boone County voters approve a senior property tax freeze on the ballot April 2, schools and other local taxing entities could see a drop in revenue. The loss of those funds could affect the ability of cities to pay for basic items, such as police salaries.

For school districts, the result could mean less money for teachers, several local government leaders reported.

The optional measure, if approved by voters, would freeze tax rates on property taxes for eligible seniors in Boone County. To qualify, people must be 62 years old or older. Eligible taxpayers must also own or have a legal or equitable interest in a residence and must be liable to pay real property taxes, according to the bill.

Each county can decide on its own whether to freeze property taxes for seniors. At least 11 counties in Missouri have implemented the property tax freeze, according to previous Missourian reporting. Late last year the Boone County Commission declined to implement the policy because of concerns about unclear language and the effect on taxing jurisdictions that are more reliant on property taxes, like school, library and fire protection districts.

The commission later opted to put the proposed tax freeze on the ballot. Taxing entities in Boone County wrote to Presiding Commissioner Kip Kendrick last year after the governor signed SB 190. Respondents, many of whom represented school districts, expressed concerns about the potential financial impacts of the bill.

Columbia Public Schools, for example, estimates that the tax freeze could cost anywhere between 10% and 20% of district revenue — which potentially could amount to $3 million to $6 million.

“Any limitation on increases to assessed valuation or property that can be included for calculating property taxes will have a significant effect on district revenue,” said Heather M. McArthur, chief financial officer for Columbia Public Schools, wrote in an Oct. 25 letter to Kendrick.

Harrisburg School District Superintendent Steve Combs said nearly one-third of the homes in the Harrisburg district are owned by residents age 62 and older who could be eligible for a tax freeze. He estimated that his district could lose up to $783,129 if SB 190 is passed.

“Everyone is in a difficult position, but this is not the solution,” Combs wrote in a Sept. 8 letter to Boone County Commissioners. Teachers and students would most likely feel the brunt of the impact, Combs said.

“School budget expenditures are primarily on personnel (teachers), so any revenue loss will mean cutting educators, directly affecting our greatest asset and future: our students,” Combs wrote.

In Ashland, City Administrator Kyle Michel expressed concerns over a potential long-term revenue loss, estimating a $75,000 loss over 10 years.

“This impact will primarily affect our public safety spending which currently accounts for 80% of our general revenue expenditures,” Michel said in a July 31 letter to the commission. “Any loss to property tax revenues severely hamstrings our ability to grow forward.”

Kendrick said, that when examining property tax freezes for seniors in different states, the commission found that local school districts would tend to ask voters to raise tax levies following a loss in revenue.

State Rep. Cheri Toalson Reisch, R-Hallsville, said taxing jurisdictions wouldn’t be significantly affected by the bill.

“The bottom line is, it’s not going to affect taxing entities enough for them to worry about,” Reisch said. “Number two, that little bit of money, it might help the elderly (and) go a long way in staying in their own home and whether they can afford to buy food or medicine.”

Reisch, who is concerned that the measure might fail on April 2 because of low voter turnout, is circulating a petition to put the property tax issue on the August or November ballot with slightly modified language to reflect a full property tax freeze.
“I plan to continue to gather signatures of Boone County Registered Voters to put the current Initiative Petition language on the August or November ballot, as it will freeze all taxing entities. I will not take the chance of the Commission doing a partial freeze,” Reisch said in a Jan. 23 press release.

Joseph Johns, a state tax policy analyst with the Tax Foundation, a nonpartisan tax policy nonprofit, pointed out several advantages and disadvantages of the bill. Johns said that enacting the bill could exempt a portion of the tax base that consumes more from Boone County than the average taxpayer, putting more of a burden on younger residents. Johns also said that the bill could also make tax filing more complex for eligible residents who choose to freeze their property taxes.
Johns said that implementating the bill could encourage younger Boone County residents to stay in the county since the structure of the bill encourages residents to buy homes and settle in the county.

According to a Jan. 23 commission press release, if the referendum is passed, the commission will “begin a public process of drafting a policy and addressing key aspects of the tax relief program.”

Kendrick said that if voters pass the measure, the commission could investigate sunsetting the program after a certain amount of time, with the possibility of renewal to determine whether the program is working as intended.
Another point that the commission could consider is enacting a stipulation that applies only to homesteads where the appraised value is $300,000 or less, as shown by the Boone County assessment file.

“I think that the commission will weigh… how do we make sure that a program can be developed in a manner that benefits the seniors who need it, those lower, moderate income seniors, while also being aware of impact on taxing jurisdictions,” Kendrick said.

Original article