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Missouri’s personal property tax back in legislative crosshairs

Missouri’s personal property tax back in legislative crosshairs

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Missouri's 100th session convenes

State Rep. John Wiemann, R-O’Fallon, is congratulated as he makes his way to the dais on Wednesday, Jan. 9, 2019, after being nominated as speaker pro tem in the Missouri House of Representatives on the first day of the legislature’s 100th session. Photo by Christian Gooden, cgooden@post-dispatch.com

JEFFERSON CITY — Republicans in the Missouri House are pushing a plan to let voters decide if they want to scrap the collection of personal property taxes.

The measure, which would cost local governments an estimated $1.7 billion in revenue, would bring the state in line with 29 others that do not have the tax on vehicles, livestock, machinery and office equipment.

Personal property is any property that is “tangible,” excluding real property such as land and buildings.

The sponsor of the proposed referendum, House Speaker Pro Tem John Wiemann, R-O’Fallon, said taxpayers hate the tax and many try to avoid paying it after purchasing vehicles.

But the tax pays for multiple services at the local level, including $900 million in revenue that goes to school districts.

“We see this as a significant reduction of revenue for public schools,” Scott Kimble of the Missouri Association of School Administrators told members of a House committee on Wednesday.

Rep. Trish Gunby, D-Manchester, said the Parkway school district, which she represents, would face major funding problems if the ballot initiative garners a majority of support.

Some lawmakers said school districts could spend down their budget reserves to cover the loss. Others said districts should assess whether they are paying their superintendents too much money.

The move also would take funding from the Blind Pension Fund, which provides financial aid to visually impaired Missourians.

It also would take money from the County Employees Retirement Fund, which pays for pensions for retired county workers.

“This bill could potentially reduce or eliminate a significant portion of CERF’s revenue stream which would have a dramatic, negative impact on the funding of the plan,” a fiscal analysis of the proposal notes.

Community colleges also would see a decrease in revenue.

Officials from St. Charles Community College said the measure would strip them of $2.3 million in operating revenue.

Bill Gamble, a lobbyist for county-level organizations that serve the developmentally disabled, said ending the tax would strip funding for services.

“These are our most vulnerable individuals. It could have an adverse impact,” Gamble said.

An effort in the Senate to dump the tax fell short earlier this year. Unlike that proposal, which would phase out the tax over five or 10 years, the House proposition would simply end the collection of the tax in 2027 if voters approve.

The Senate version, sponsored by Sen. Bill Eigel, R-Weldon Spring, ran into a bipartisan wall of opposition after hours of debate and closed-door negotiations.

St. Louis officials estimated the city would lose $16.4 million annually under the Senate version.

Taxes to all jurisdictions in the city would drop from $84.5 million to just over $2,500.

Recipients of personal property tax revenue include St. Louis Public Schools, St. Louis Public Library, the Zoo Museum District and the Metropolitan St. Louis Sewer District.

The legislation is House Joint Resolution 57.

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