COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:0678S.01I Bill No.:SJR 21 Subject:Constitutional Amendments; Taxation and Revenue - Property Type:Original Date:January 23, 2023Bill Summary:This proposal authorizes counties to freeze the real property assessed values
of certain senior citizens.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2024FY 2025FY 2026
General Revenue*
$0 or (More than
$10,000,000)**$0 $0 or Unknown
Total Estimated Net
Effect on General
Revenue
$0 or (More than
$10,000,000)**$0$0 or Unknown
*The potential fiscal impact of “(More than $10,000,000)” in FY 2024 would be realized only if
a special election were called by the Governor to submit this joint resolution to voters. Also, if
voters approve the joint resolution and if local taxing jurisdictions approve exemptions, the
savings to the state of Senior Property Tax Credits could possibly reach the $250,000 threshold
**SOS has updated the estimated cost of a statewide special election after examining actual
reimbursement costs for the General Primary and General Election held during 2022.
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Blind Pension Fund$0$0 $0 or (Unknown)Total Estimated Net
Effect on Other State
Funds $0$0 $0 or (Unknown)
Numbers within parentheses: () indicate costs or losses. L.R. No. 0678S.01I
Bill No. SJR 21
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January 23, 2023
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on FTE 000
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☒ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Local Government$0*$0 $0 or (Unknown)
*Transfer out and transfer in nets to zero if the Governor calls a special election. L.R. No. 0678S.01I
Bill No. SJR 21
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January 23, 2023
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FISCAL ANALYSIS
ASSUMPTION
Officials from the State Tax Commission (STC) assume this proposal will have an unknown
fiscal impact on local taxing jurisdictions such as school districts, counties, cities who rely on
property tax assessments as a source of revenue. The constitutional amendment, if approved by
the voters, allows a taxing district to exempt taxpayers sixty-five years or older from increases in
the rate of property tax. Such exemption shall either be approved by the governing body of the
taxing district or approved by the voters in the local taxing district. The STC does not have data
to determine how many of the 1,061,775 Missourians over sixty five who meet the proposed
criteria and eligibility or how many of the 2,900 taxing jurisdictions may choose to grant the
exemption from increases in the rate of property tax.
Officials from the Office of Administration - Budget and Planning (B&P) note this proposal
would go to a public vote in November 2024. If voter approved, this proposal would begin
January 1, 2025; however, this language would only allow counties and the City of St. Louis to
freeze the assessment increases. Counties and the City of St. Louis would then be required to
pass an ordinance creating the assessed value freeze. Therefore, B&P assumes that the earliest
any such county could implement this would be for tax year 2025 property tax liabilities. B&P
notes that property tax liabilities are paid annually in December. Therefore, this proposal may
have an unknown impact on local property tax revenues as early as FY26.
B&P notes that property taxes for all taxing jurisdictions located in a county (fully or partially)
are levied and collected at the county level. Therefore, B&P assumes that if a property tax
assessment freeze were granted within a specific county, the freeze would apply to all property
tax levies. This would include countywide levies, city/town/village levies, special levies (such as
ambulance districts), and the statewide levy for the Blind Pension Trust Fund.
B&P further notes that it is unclear which assessed value would prevail if a taxpayer were to
move between two local jurisdictions after reaching age 65: whether it would be the assessed
value in the year the individual moved into the new jurisdiction or the assessed value the year of
local approval of the freeze. B&P assumes that the assessment value would be frozen to the
value in the year the individual moved into the taxing jurisdiction.
B&P also notes that it is unclear what would happen to the assessed value of property that is
owned by a qualifying individual, but subsequently is sold or transferred to a non-qualifying
individual. It is unclear if the assessed value would begin increasing from the value as of the year
of sale/transfer, or if past (forgone) increases to assessed value would be applied in the year of
sale/transfer.
B&P notes that the Blind Pension Trust Fund levies a property tax rate of $0.03 per $100 of
assessed value. Since this proposal requires subsequent jurisdiction approval, this proposal will L.R. No. 0678S.01I
Bill No. SJR 21
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January 23, 2023
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not have a direct impact on revenues to the Blind Pension Trust Fund. However, this proposal
may result in an indirect loss to Blind Pension Trust Fund Revenues.
Officials from the Department of Revenue (DOR) assume this proposal would freeze any
increase in the assessment valuation rates of any property taxes levied on any property owned by
an individual who has attained an age of at least sixty-five years and is liable for the payment of
real property taxes on property. The local political subdivision may implement income limits to
qualify for this freeze in rate. This proposal does not completely eliminate what is currently
owed, but would slow the rate of growth of property taxes collected in the future.
This proposal would need to be voted on by the citizens at the November 2024 general election
to be adopted as a constitutional amendment. This proposal, should it be adopted at the
November 2024 election, would not be certified until December 2024 and this proposal could not
be implemented until January 1, 2025.
DOR notes should this proposal not be adopted as a constitutional amendment, this proposal
would have no fiscal impact. Should the constitutional amendment, be adopted then it is up to
the local political subdivisions to hold an election to adopt the proposal.
This proposal would require each political subdivision wanting to freeze the property tax of these
seniors to hold an election. It is assumed the first available election that local political
subdivision could put this on the ballot would be the April 2025 municipal election. The
Department will assume this would start October 1, 2025, the second quarter after passage of this
proposal. This would change the property tax rate during the middle of a tax year.
DOR notes if no local political subdivisions adopt an ordinance this proposal will have no fiscal
impact. Should any local political subdivisions choose to adopt the ordinance, then the local
political subdivision would receive less property tax and the state may be impacted.
The only property tax collected by the State is for the Blind Pension Fund. The Missouri Blind
Pension Fund is a fund for payment of pensions for the blind. The tax, or collection for the fund,
consists of 3 cents on each $100 valuation of taxable property in the State of Missouri. Should
the valuation of property hold the same and not increase, then this could result in future lost
revenue.
DOR notes the state may also have an impact to the Senior Property Tax Credit. Some seniors
paying property tax are eligible to receive the senior property tax credit. Claims for the credit are
based on the actual amount of property tax paid. Freezing the property tax rates will result in a
savings of future lost revenue (due to increasing property tax rates).
The Department is unable to determine how much of the total valuation of real property in tax
year 2020 is attributed to properties owned by individuals who would qualify for this future real
property tax freeze. The Department is also not able to predict if any political subdivisions will L.R. No. 0678S.01I
Bill No. SJR 21
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adopt this proposal or when they may adopt it; and therefore the impact of this proposal is
unknown.
Officials from Office of the Secretary of State (SOS) assume, each year, a number of joint
resolutions that would refer to a vote of the people a constitutional amendment and bills that
would refer to a vote of the people the statutory issue in the legislation may be considered by the
General Assembly.
Unless a special election is called for the purpose, Joint Resolutions proposing a constitutional
amendment are submitted to a vote of the people at the next general election. Article XII section
2(b) of the Missouri Constitution authorizes the governor to order a special election for
constitutional amendments referred to the people. If a special election is called to submit a Joint
Resolution to a vote of the people, section 115.063.2 RSMo requires the state to pay the costs.
The cost of the special election has been estimated to be $10 million based on the cost of the
2022 primary and general election reimbursements.
The Secretary of State’s office is required to pay for publishing in local newspapers the full text
of each statewide ballot measure as directed by Article XII, Section 2(b) of the Missouri
Constitution and Section 116.230-116.290, RSMo. Funding for this item is adjusted each year
depending upon the election cycle. A new decision item is requested in odd numbered fiscal
years and the amount requested is dependent upon the estimated number of ballot measures that
will be approved by the General Assembly and the initiative petitions certified for the ballot. In
FY 2014, the General Assembly changed the appropriation so that it was no longer an estimated
appropriation.
For the FY24 petitions cycle, the SOS estimates publication costs at $70,000 per page. This
amount is subject to change based on number of petitions received, length of those petitions and
rates charged by newspaper publishers.
The Secretary of State’s office will continue to assume, for the purposes of this fiscal note, that it
should have the full appropriation authority it needs to meet the publishing requirements.
Because these requirements are mandatory, the SOS reserves the right to request funding to meet
the cost of the publishing requirements if the Governor and the General Assembly again change
the amount or continue to not designate it as an estimated appropriation.
Oversight has reflected, in this fiscal note, the state potentially reimbursing local political
subdivisions the cost of having this joint resolution voted on during a special election in fiscal
year 2024. This reflects the decision made by the Joint Committee on Legislative Research that
the cost of the elections should be shown in the fiscal note. The next scheduled statewide
primary election is in August 2024 and the next scheduled general election is in November 2024
(both in FY 2025). It is assumed the subject within this proposal could be on one of these ballots;
however, it could also be on a special election called for by the Governor (a different date).
Therefore, Oversight will reflect a potential election cost reimbursement to local political
subdivisions in FY 2024. L.R. No. 0678S.01I
Bill No. SJR 21
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Officials from the City of Springfield anticipate this proposal would cause a negative fiscal
impact of an undetermined amount.
Officials from the Newton County Health Department assume this proposal would cause a
negative fiscal impact on the Newton County Health Department depending upon the number of
citizens eligible for the tax reduction. The impact would be the difference in taxes collected
before this provision compared to taxes collected after the provision.
Officials from the Lincoln County Assessor note this proposal will place more tax burden on
the taxpayers that do not qualify for the assessment freeze. Additionally, officials from Lincoln
County note time-consuming documentation will be needed every year if income guidelines are
required to qualify for the exemption. This would be a burden on the taxpayers as well to provide
the necessary information to qualify.
Officials from the City of Kansas City assume the proposal will have no fiscal impact on their
city.
Officials from the Department of Social Services and the Office of the State Auditor each
assume the proposal will have no fiscal impact on their respective organizations. Oversight does
not have any information to the contrary. Therefore, Oversight will reflect a zero impact in the
fiscal note for these agencies.
Oversight notes the Blind Pension Fund (0621) is calculated as an annual tax of three cents on
each one hundred dollars valuation of taxable property ((Total Assessed Value/100)*.03).
Because this proposal limits the assessed value portion of this equation, the Blind Pension Fund
may experience a decrease in revenue relative to what it would have received under current law.
Therefore, Oversight will show an unknown loss the Blind Pension Fund.
Per the STC’s website, total assessed value for residential property was $69,816,718,311 in
2021. If this proposal reduced the total assessed value by 1.5%, the loss to the Blind Pension
Fund is estimated at $314,175.
Total Assessed Value (Current)$69,816,718,311Total Assessed Value if reduced by 1.5% (Assumed)$68,769,467,537Difference -$1,047,250,774Divided by 100 -$10,472,508Multiplied by 0.03 (Estimated Changed)-$314,175
Based on Demographic Characteristics for Occupied Housing Units from the United States
Census Bureau, Oversight notes there are 517,775 owner-occupied housing units where the age
of the householder is 65 years of age or older. Oversight is uncertain how many would have
qualifying income or how many taxing districts would approve the exemption of these
properties. Therefore, Oversight is uncertain how many would be exempt from increases in
assessed value. L.R. No. 0678S.01I
Bill No. SJR 21
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January 23, 2023
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In addition, Oversight assumes there could be a saving to General Revenue from a reduction in
the amount of Senior Property Tax Credits claimed. Oversight will show a range of impact of $0
(no reduction) to an unknown savings to General Revenue.
Oversight notes property tax revenues are designed to be revenue neutral from year to year. The
tax rate is adjusted relative to the assessed value to produce roughly the same revenue from the
prior year with an allowance for growth. Therefore, this proposal may result in a higher tax rate
relative to current law thus distributing more of the tax burden to real property owners who are
under 65 (as the assessed values relatively decrease for credit-qualifying property owners).
Oversight notes some taxing entities have tax rate ceilings that are at their statutory or voter
approved maximum or are at a fixed rate. For these taxing entities, any decrease in the assessed
values would not be offset by a higher tax rate (relative to current law), rather it would result in
an actual loss of revenue.
Based on information provided by the Office of the State Auditor, Oversight notes, in 2020,
there were over 2,500 tax entities with 4,000 different tax rates. Of those entities, 2,980 tax rate
ceilings were below the entities’ statutory or voter approved maximum tax rate and 1,098 tax rate
ceilings were at the entities’ statutory or voter approved maximum rate. (These numbers do not
include entities which use a multi-rate method and calculate a separate tax rate for each subclass
of property.)
Oversight will show a range of impact of $0 (no local political subdivisions adopt the proposed
ordinance) to an unknown loss in property tax revenue for local political subdivisions.
In addition, Oversight assumes there could be costs to local taxing entities which approve the
exemption to implement and monitor individual property assessed value freezes. Oversight will
show an unknown cost to local political subdivisions for implementation.
Oversight notes this proposal is contingent on a voter approved amendment to the Constitution.
Oversight will show the impact as either $0 (Constitutional amendment is not approved by
voters) to an unknown loss in revenue to the Blind Pension Fund and local political subdivisions
beginning in FY 2026.
Oversight received a limited number of responses from local political subdivisions related to the
fiscal impact of this proposal. Oversight has presented this fiscal note on the best current
information available. Upon the receipt of additional responses, Oversight will review to
determine if an updated fiscal note should be prepared and seek the necessary approval to
publish a new fiscal note.
Oversight only reflects the responses received from state agencies and political subdivisions;
however, other local political subdivisions were requested to respond to this proposed legislation L.R. No. 0678S.01I
Bill No. SJR 21
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but did not. A listing of political subdivisions included in the Missouri Legislative Information
System (MOLIS) database is available upon request.
FISCAL IMPACT – State GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026GENERAL REVENUECost Avoidance - reduction in the
amount of Senior Property Tax Credit
claims (p. 5)$0$0
$0 or
Unknown
Transfer Out - SOS - reimbursement of
local election authority election costs if
a special election is called by the
Governor (p. 3)
$0 or
(More than
$10,000,000)*$0$0
ESTIMATED NET EFFECT ON
GENERAL REVENUE
$0 or
(More than
$10,000,000)*$0
$0 or
Unknown
BLIND PENSION FUNDLoss - from a decrease in assessed
value (p. 6-7)$0$0
$0 or
(Unknown)
ESTIMATED NET EFFECT ON
THE BLIND PENSION FUND$0$0
$0 or
(Unknown)
*SOS has updated the estimated cost of a statewide special election after examining actual
reimbursement costs for the General Primary and General Election held during 2022. L.R. No. 0678S.01I
Bill No. SJR 21
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FISCAL IMPACT – Local GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026LOCAL POLITICAL
SUBDIVISIONS
Costs – Local Election Authorities – to
vote on implementing assessed value
increase exemptions (p. 5-7)$0$0
$0 or
(Unknown)
Costs - Assessors - implementation and
monitoring of assessed value increase
exemptions on certain properties (p.7)$0$0
$0 or
(Unknown)
Revenue Loss – from assessed value
increase exemptions (p.7)$0$0
$0 or
(Unknown)
Transfer In - Local Election
Authorities - reimbursement of election
costs by the State for a special election
(p.3)
$0 or More
than
$10,000,000*
$0$0
Costs - Local Election Authorities -
cost of a special election if called for by
the Governor (p.3)
$0 or (More
than
$10,000,000)*$0$0
ESTIMATED NET EFFECT ON
LOCAL POLITICAL
SUBDIVISIONS$0$0
$0 or
(Unknown)
*SOS has updated the estimated cost of a statewide special election after examining actual
reimbursement costs for the General Primary and General Election held during 2022.
FISCAL IMPACT – Small Business
Oversight assumes there could be a fiscal impact to small businesses if tax rates are adjusted
relative to changes in assessed value.
FISCAL DESCRIPTION
This constitutional amendment, if approved by the voters, allows a county or a city not within a
county to exempt taxpayers sixty-five years of age or older meeting certain criteria, as described
in the amendment, from increases in the assessed valuation of such taxpayer's residential real
property. Such exemption shall be approved by the governing body of the county or city not
within a county through an ordinance. In addition to criteria required in the amendment to L.R. No. 0678S.01I
Bill No. SJR 21
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receive an exemption, a county or city not within a county may also require a taxpayer to meet
certain income requirements.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space.
SOURCES OF INFORMATION
Office of Administration - Budget and Planning
Department of Revenue
Department of Social Services
Office of the Secretary of State
Office of the State Auditor
State Tax Commission
Newton County Health Department
Lincoln County Assessor
City of Kansas City
City of Springfield
Julie MorffRoss StropeDirectorAssistant DirectorJanuary 23, 2023January 23, 2023