Why the New Property Tax Rules in Missouri Are Bad, Part 2

This is the second in a series of blog posts about why the new property tax legislation passed as part of Senate Bill 3 in the recently concluded special session of the Missouri Legislature is harmful.

The new state law creates three types of counties with different rules for property taxes and assessments: five percent counties (75 total counties), zero percent counties (22), and unaffected counties (17). For more details on the differences among these counties, go here.

There are many reasons why these substantial changes to the system are bad. The first one, which I wrote about previously, is that property taxes are generally the least harmful tax for economic growth. So, if you want to create a tax system that encourages greater economic opportunity for all Missourians, the property tax is the last tax you should focus on.

This post is about the absurdity of putting Jackson County in the unaffected category. Jackson County is home to most of Kansas City and is the second-largest county in Missouri. It has had by far the worst administration of assessment and tax collection in recent years of any Missouri county. This is like a patient going to the doctor with a bad left knee and the hospital deciding to amputate their right arm. You made everything worse but didn’t address the main problem that started it all.

The solution to Jackson County’s issues is not to simply make it a zero percent or five percent county. That would cause serious problems over time, which we will eventually see in the other zero and five percent counties in Missouri if the law is upheld in court. What you need in Jackson County is first and foremost better administration. If 113 counties can generally make the assessment and tax process work without being sued by the state tax commission and one cannot, then the problem is with the one county, not with the overall process. Electing the Jackson County Assessor (instead of the assessor being appointed), which will be voted on soon, would be a good start. From a tax bill perspective, ending the rate rollback exemption for the Kansas City 33 School District is a vital change. The main reason bills increase so much in that part of Kansas City is because that district does not have to roll rates back at all, unlike every other taxing body in Missouri. Major reforms were needed in Jackson County, but instead in the special session we got bad legislation that did nothing for the taxpayers there. That’s not a win for anyone.

Future posts will discuss the potential constitutional problems with this bill, the harmful effects of favoring current homeowners over future homeowners, and a discussion of Charles Tiebout and his theories. For more information, please see my testimony from the special session, these policy studies on this issue of property taxes and assessments, and related commentaries.