COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:1079S.01P Bill No.:Perfected SJR 26 Subject:Taxation and Revenue - Property; Children and Minors; Constitutional
Amendments
Type:Original Date:March 1, 2023Bill Summary:This proposal authorizes a property tax exemption for certain property used
for childcare.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2024FY 2025FY 2026
General Revenue*
$0 or (More than
$10,000,000)**
Total Estimated Net
Effect on General
Revenue
$0 or (More than
$10,000,000)**$0$0
*The potential fiscal impact of “(More than $10,000,000)” would be realized only if a special
election were called by the Governor to submit this joint resolution to voters.
**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 2026Total Estimated Net
Effect on Other State
Funds $0$0$0
Numbers within parentheses: () indicate costs or losses. L.R. No. 1079S.01P
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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
*Potential costs and state reimbursements net to zero in FY 2024 if a special election is called. L.R. No. 1079S.01P
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FISCAL ANALYSIS
ASSUMPTION
Officials from the Department of Social Services (DSS) note Section A. Section 6, article X of
the Missouri Constitution is amended to exempt from taxation all real and personal property used
primarily for childcare provided to children outside of their home.
DSS notes the Blind Pension (BP) is funded from 0.03% of each $100 assessed valuation of
taxable property. Exempting properties from taxation will affect the growth of the Blind Pension
fund, but will not decrease the current amount collected in the fund.
DSS notes property Tax income for the BP fund in SFY 2022 was $39,771,524 or approximately
$39.8 million (rounded up). The amount collected from real and personal property used primarily
for childcare provided to children outside of their home is unknown. To determine the impact of
this legislation, FSD made the assumption that up to 1% of all property is used to provide
childcare. 1% of the property tax revenue collected for the BP fund is $397,715 ($39,771,524 *
.01 = $397,715.24, rounded down).
Therefore, DSS assumes the impact to the BP fund is up to $397,715 beginning in SFY 26.
Officials from the Office of Administration - Budget and Planning note this proposal would
go to public vote in November 2024. For the purpose of this fiscal note, B&P assumes that the
tax exemption would begin January 1, 2025 if voter approved.
This proposal would allow certain property to become exempt from real and/or personal property
taxation. The property must be used primarily for childcare outside of a child’s home. B&P notes
that this proposal is only enabling language to allow a property tax exemption under statute, this
proposal would not itself create the exemption. Therefore, any potential revenue impact(s) would
be discussed in the fiscal notes for subsequent legislation.
Officials from Office of the Secretary of State 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. L.R. No. 1079S.01P
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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.
Officials from the State Tax Commission determined 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, exempts childcare
facilities from any real or personal property tax. The agency would not have data to determine
how many childcare facilities would meet the proposed criteria and eligibility.
Officials from the Department of Revenue, Department of Health and Senior 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. L.R. No. 1079S.01P
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Officials from the City of Kansas City assume this legislation is projected to have a negative
fiscal impact on Kansas City of an indeterminable amount. Additional exemptions will hamper
the City of Kansas City’s ability to ensure that basic services such as public safety, road repair,
and emergency response can continue to be provided to serve the needs of the City’s growing
population.
Officials from the City of O’Fallon and the City of Springfield
have no fiscal impact on their respective cities.
Officials from the Newton County Health Department assume the proposal would cause a
negative fiscal impact on the Newton County Health Department dependent upon the number of
properties eligible for this reduction of property tax.
Officials from the Hannibal Rural Fire Protection District (HANR) assume the proposal
could impact tax revenues for their fire district.
Officials from the Lincoln County Assessor’s Office assume this proposal would result in a tax
burden loss, which would shift to recoup lost revenue.
Officials from the St. Charles Community College anticipate a negative fiscal impact that
cannot be quantified as a result of this proposal.
Oversight notes according to the Department of Elementary and Secondary Education’s website,
there were 738 active in-home/group home childcare providers in Missouri as of January 2023.
Oversight notes this proposal is only enabling language to allow governing bodies to pass laws
relating to property tax exemption for all real and personal property used primarily for childcare
provided to children outside of their home. Therefore, Oversight will show only the potential
election cost in FY 2024 and assume any potential fiscal impact would be included in the fiscal
note for ‘general laws’ enacting this property tax exemption.
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
but did not. A general listing of political subdivisions included in the Missouri Legislative
Information System database is available upon request. L.R. No. 1079S.01P
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FISCAL IMPACT – State GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026GENERAL REVENUETransfer Out - SOS - reimbursement of
local election authority election costs if
a special election is called by the
Governor
$0 or (More
than
$10,000,000)*$0$0
ESTIMATED NET EFFECT ON
GENERAL REVENUE
$0 or (More
than
$10,000,000)*$0$0
*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 – Local GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026LOCAL POLITICAL
SUBDIVISIONS
Transfer In - Local Election
Authorities - reimbursement of election
costs by the State for a special election
$0 or More
than
$10,000,000*
$0$0
Costs - Local Election Authorities -
cost of a special election if called for by
the Governor
$0 or (More
than
$10,000,000)*$0$0
ESTIMATED NET EFFECT ON
LOCAL POLITICAL
SUBDIVISIONS$0$0$0
*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. 1079S.01P
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FISCAL IMPACT – Small Business
Certain small childcare business owners may be impacted, pending voter approval and if
enacting general laws are passed.
FISCAL DESCRIPTION
This constitutional amendment, if approved by the voters, would allow under general law an
exemption from property tax all real and personal property used primarily for the care of a child
outside of his or her home.
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
Department of Social Services
State Tax Commission
Office of Administration - Budget and Planning
Department of Revenue
Office of the Secretary of State
Department of Health and Senior Services
Office of the State Auditor
Department of Social Services
City of Kansas City
City of O’Fallon
City of Springfield
Newton County Health Department
Hannibal Rural Fire Protection District (HANR)
Lincoln County Assessor’s Office
St. Charles Community College
Julie MorffRoss StropeDirectorAssistant DirectorMarch 1, 2023March 1, 2023