So, What Exactly Should Missouri Do about Property Taxes and Assessments?

Property assessment increases are driving people crazy throughout Missouri. People love it when their homes increase in value, except when they hate that their homes increase in value. High inflation means that local governments will not have to roll their rates back this year as much as in prior years, so the combo of high assessment increases and small rate rollbacks will likely mean substantial tax increases for many Missourians later this year. Obviously, politicians want to address this high-profile issue.

Wanting to do something to address higher property assessments and taxes should not mean doing the wrong thing, though, and doing the wrong thing is where we are headed. Giving one population group a tax or assessment freeze, as state law allows counties to do this year and which many are considering, is wrong for reasons you can read here. A more comprehensive limit on the rise in assessed valuations or taxes, similar to what California famously did with Prop 13 in 1978, is also the wrong thing to do. Proposition 13 has certainly had its intended effect of making it easier for California residents to stay in their own homes. However, it has also reduced mobility, dramatically increased alternative taxes, limited homeownership opportunities, and caused substantial tax disparities among similar properties receiving similar services. This is not what we need for Missouri.

The easiest way to address that—for local governments to voluntarily roll their tax rates back more than legally required (as St. Charles County did in 2022)—is unlikely to happen in most places and especially unlikely for school districts, which make up the bulk of your tax bill. So, what else can we do about property taxes and assessments?

There are things people and government can do in the short term to make the overall process better. Right now, people should be pressuring their local officials to roll tax rates back, especially the Kansas City school district which is the only taxing body in the state exempt from rate rollbacks. Removing that constitutional exemption for KCSD should also be a high priority. That would involve amending the state constitution, but it should be a high priority to get that on the ballot in the next legislative session.

While we are addressing short-term impacts and constitutional changes, adding personal property to the tax rate rollback requirements should absolutely be done. In 2021 and 2022, many local governments enjoyed a windfall from increased used car values. That is not how the system is supposed to work.

Finally, did you know that a few counties require certificates of value to be filed with the assessor when property is sold but most do not? We should require them statewide to help make assessments more accurate, especially in rural areas.

In my next post, I’ll discuss what we can do in the long run to make our property tax and assessment system better.