The Dangers of House Bill 148

Gov. Jay Nixon has vetoed House Bill 148, which is one of those “omnibus” pieces of legislation, in this case involving the rules and regulations for local governments. The gov’s reason for vetoing the bill relate to the following section, which would have been truly awful for Missourians:

(6) Authorizes political subdivisions, for tax year 2009, to levy a property tax rate sufficient to generate as much revenue as was produced in the 2007 tax year, excluding new construction and improvements, as long as the rate does not exceed the greater of the rate in effect for the 1984 tax year or the most recent voter-approved rate. Currently, if a political subdivision experiences a decrease in assessed value, the subdivision may increase its tax rate ceiling up to the most recent voter- approved rate in order to receive the same amount of revenue as allowed in the previous year. Beginning August 28, 2009, the bill allows a political subdivision which experiences a decrease in assessed value to roll-up its tax rate to the greater of the rate in effect for the 1984 tax year or the most recent voter- approved rate in order to collect the same amount of tax revenue allowed in the previous year;

Thank God for the veto. I was stunned to see the significant margins by which this passed. I honestly think that many of the legislators who voted for this were not aware of this part. This paragraph nullifies the great work done previously by Sen. Mike Gibbons and property tax activists like Sarah Haenni in 2008’s Senate Bill 711, which made important changes to our assessment system and ends the practice of back-door assessment tax increases. Some of the elected officials who helped lead the effort to pass Senate Bill 711 voted in favor of this bill, and, again, I have to hope that they didn’t know what they were voting on in this very large bill.

We have advocacy limitations here at the Show-Me Institute, so I can’t come out and say that a particular vote or veto should be passed or overridden or whatever. However, we’re entirely free to point out positive or negative consequences of proposed legislation — and the changes in H.B. 148 would have been a disaster for Missouri taxpayers and property owners. Why anyone in the legislature would want to give local governments a blank check to raise property tax rates back to 1984 levels is beyond me. Using 1984 as a baseline for those levels was not a coincidence; it predates the current assessment system, and many 1984 property tax rates were much higher than they are now, given that rates have been lowered over time as property assessments increased.

I don’t want to single anyone out, but I repeat that there some of the people who voted for this bill are those that I cannot fathom supporting the portion quoted above. I am proud that my state rep, Jake Zimmerman, voted against it, as did my friend, John Diehl, and a number of St. Louis County reps of both parties. I just hope that, before the votes on overriding the veto take place, every state rep and senator (this terrible idea passed unanimously in the Senate) knows how much this bill could increase local property taxes.