Driven by the sticker shock of Jackson County homeowners who got big property assessment hikes two years ago, a Missouri lawmaker is pushing legislation to change how assessors statewide value properties for taxation.
The bill would freeze property assessments at their last sale price and only allow them to rise with inflation or property improvements, a departure from the state constitution’s current requirement that assessments are tied to a home’s true market value.
It received a first round of approval on the state House floor this week and needs to undergo fiscal review and pass another vote to be sent to the Senate. If approved, voters would also have to pass a constitutional amendment to allow the changes.
Rep. Jeff Coleman, a Grain Valley Republican who sponsored the bill, said his goal is to protect low-income and older homeowners from rising property taxes.
“People that have been in their houses for 30 and 40 and 50 years are scared to death that they’re going to lose their house because of the taxes that they’re having to pay on it every two years and how much they continue to increase,” he told the House Ways and Means Committee in February. “They’re increasing faster than what their incomes are.”
Jackson County’s assessment director, Gail McCann Beatty, said such a change would create “a huge inequity” in the property tax system by favoring the longtime owners of a property whose value has risen, over a more recent purchaser of an identical property.
The State Tax Commission told legislative analysts the same thing in the bill’s fiscal note: “Restrictions on assessment growth may create disparities and inequities over time among residential and commercial properties as market values can fluctuate.”
School districts and local governments could lose revenue if property values are frozen. Three quarters of Missouri school districts’ tax rates have hit a state-imposed ceiling and could not be raised to make up the revenue, according to the tax commission.
Beatty’s office came under fire in 2019 after a reassessment that resulted in increases of more than 15% on about a third of the county’s 300,000 property assessments, with some owners seeing three- or fourfold hikes in their values.
County officials said they were bringing assessments closer to the homes’ actual market values after years of undervaluing county properties, but the sudden hikes came as a shock to residents. The office had previously been told by the State Tax Commission its property values were too low — violating a Missouri requirement that assessments be between 90% and 110% of properties’ market values.
Even the 2019 reassessment, Beatty said, still undervalued Jackson County properties. She said her office received a letter from the commission this week that the overall amount of assessed value from that year was only 85% of county properties’ market value. The state calculates market values using data of the county’s recent home sales.
Thousands appealed their assessments in 2019, and homeowners sued Beatty, claiming some inaccuracies in the new values. The assessment office did not inspect all properties in person, capping some assessment hikes in a way that one lawsuit claimed favored predominantly white areas over areas where residents were African-American or Hispanic.
Beatty said for the reassessment this year and in 2023, the office has added staff and hired an appraisal company to evaluate each parcel.
On the House floor on Tuesday, Coleman added a measure to the bill that would give all properties an across-the-board 20% assessment reduction.
Some lawmakers who have worked as assessors in other counties objected to the proposals. Cape Fair Republican Brad Hudson warned that allowing assessments to drift from market values would create “unintended consequences.”
“My job was to value property based on what it was worth so that the tax burden could be applied fairly,” he said. “We’re talking about the pie and who’s going to have to pay for the biggest share of it.”
Others said a blanket reduction would not fix inequitable assessments.
Coleman said homeowners facing rising values are not concerned with how their assessments compare to their neighbors.
“The people that are on lower incomes and fixed incomes, they don’t care about that,” he said.