COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:3064H.01I Bill No.:HJR 78 Subject:Taxation and Revenue - General; Constitutional Amendments; Property, Real and
Personal; State Tax Commission; Department of Revenue; Housing; Elderly
Type:Original Date:January 23, 2024Bill Summary:This amendment proposes a constitutional amendment relating to real
property tax assessments.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2025FY 2026FY 2027
General Revenue*
$0 or (More than
$8,000,000)$0$0 or Unknown**
Total Estimated Net
Effect on General
Revenue
$0 or (More than
$8,000,000)$0$0 or Unknown**
*The potential fiscal impact of “(More than $8,000,000)” would be realized only if a special
election were called by the Governor to submit this joint resolution to voters.
**Oversight notes the potential savings to the General Revenue Fund is from reduced Senior
Property tax credits issued if the proposed changes in the base year result in lower property tax
bills for qualifying seniors in the future. Oversight assumes the potential savings will not reach
the $250,000 threshold in the next three years because the change in the base years will be
relatively small until future years.
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2025FY 2026FY 2027Blind 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. 3064H.01I
Bill No. HJR 78
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January 23, 2024
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2025FY 2026FY 2027Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2025FY 2026FY 2027Total 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 2025FY 2026FY 2027Local Government$0*$0$0 or (Unknown)
*Transfers and costs net to zero if the Governor calls a special election.
FISCAL ANALYSIS L.R. No. 3064H.01I
Bill No. HJR 78
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January 23, 2024
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ASSUMPTION
In response to similar proposals, 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 $8 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 FY25 petitions cycle, the SOS estimates publication costs at $60,000 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 2025. 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 general
election is in November 2024 (FY 2025). It is assumed the subject within this proposal could be
on this ballot; 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 2025. L.R. No. 3064H.01I
Bill No. HJR 78
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January 23, 2024
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Officials from the Office of Administration - Budget and Planning (B&P) assume this
proposal would go to a public vote in November 2024. If voter approved, B&P assumes that this
provision would become effective for tax year 2025. This proposal would freeze the assessment
value of real property used as a primary residence for individuals 65 years and older who own
their home.
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
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.
B&P notes that this proposal appears to duplicate SB 190 (2023). SB 190 (2023) grants a tax
credit for the difference in a taxpayer's real property tax liability in a given tax year less the
liability amount they owed when they first qualified for the credit. B&P further notes that
multiple jurisdictions have adopted the SB 190 tax credit in at least some form.
Officials from the Department of Revenue (DOR) note this is a constitutional amendment that
will be voted on at the November 2024 general election. If the amendment is not adopted it will
not have a fiscal impact. If it is adopted, it would allow some home owning residents to be
assessed at a lower rate. This would allow homeowners on their primary residence that turn 65
in 2025 or later to have as their true value of their property the same in the future as their most
recent assessment when they turned 65. It is unclear if a person age 65 before 2025 would be
allowed to receive this reduction.
Residential property tax is calculated by using the appraised value of the property and
multiplying that by the applicable percentage to get the assessed value. The assessed value is
then multiplied by the local property tax rate (levy) to determine the amount owed. Property tax
is owed by December 31
st
each year. Due to how the levy is adjusted it is unclear if this would
result in a lesser amount of property tax being owed.
The Senior Property Tax Credit allows qualified seniors to get a tax credit for the property tax
they pay. Should qualified seniors pay less in property tax then there could potentially be a
savings to the Senior Property tax credit. At this time, the impact is Unknown.
Blind Pension Fund
This proposal does not make clear if the constitutionally created Blind Pension Fund (Article III,
Section 38(b)) would still be allowed to assess their property tax on all properties. The Missouri
Blind Pension fund receives $.03 for each $100 valuation of taxable property in the state of
Missouri. DOR defers to the Department of Social Service for the fiscal impact.
Summary
Property tax is handled by the County Assessors and the State Tax Commission. DOR assumes a
small unknown impact. L.R. No. 3064H.01I
Bill No. HJR 78
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January 23, 2024
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Officials from the State Tax Commission (STC) have determined that this bill proposes
residential real property be valued at the most recent assessed value, or the fair market value for
said property be determined at the most recent sale. This bill also proposes that the increase of
real residential property is the Consumer Price Index percentage rate of increase or 2%
whichever is less. Additionally, the bill would freeze the assessment for property owners that are
65 years of age or older. If an individual 65 or over purchases a new home, the assessment
would be frozen at the previous sale price or assessment.
This proposal has an unknown fiscal impact on the State Tax Commission, however the
limitation on assessment growth may negatively impact revenues for school districts, counties,
cities, fire districts and other local taxing jurisdictions supported by property tax revenues.
Additionally, restrictions on assessment growth may create disparities and inequities over time
among residential properties and categories of homeowners, potentially shifting a greater share
of the tax burden from one class of homeowner to another. A newer home's true market value
used for assessment may increase far more than an older home or vice versa depending on
market conditions. An assessment limit may impact assessment growth and over time potentially
create a large disparity.
Oversight notes this proposal would set the true value of a property (that has been sold since its
most recent assessment) at the total fair market value of the compensation received by the seller.
Oversight assumes if the compensation received by the seller is substantially different from the
value as determined by the county assessor, this proposal could impact property tax revenues for
the Blind Pension Fund and local political subdivisions. Oversight notes the STC conducts a
biennial ratio study
recent sale price or value estimated by an independent appraisal. Most county ratio studies
indicate the assessed values are below (in some cases substantially below) the market value
proxy.
For purposes of this fiscal note, Oversight assumes this provision could cause an increase in
assessed values. Oversight will show a range of impact for this provision from $0 (the joint
resolution is not passed or tax levies are able to be adjusted) to an unknown gain in revenue.
Additionally, for properties that have not sold since their most recent assessment, Oversight
assumes this proposal would limit increases in the assessed values of individual residential
property to the change in CPI per year (estimated at 6.5% for 2022) or 2% whichever is lower.
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 other property owners.
Oversight notes some taxing entities have tax rate ceilings that are at their statutory or voter
approved maximum. 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 a loss of revenue. L.R. No. 3064H.01I
Bill No. HJR 78
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January 23, 2024
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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 reduces (or limits growth) the assessed value portion of this equation, the
Blind Pension Fund will experience a decrease in revenue relative to what it would have received
under current law.
Oversight assumes the magnitude of the impact to the Blind Pension Fund would depend on
prevailing market conditions.
Oversight assumes the impact from setting the value of real residential property at the
compensation the seller would receive would be smaller than the impact from the cap on
assessed values given that it would affect a smaller subset of properties. However, if this
assumption is incorrect, this could alter the fiscal impact as presented in this fiscal note.
Based on data from the United States Census Bureau, Oversight notes there are 530,159 owner-
occupied housing units where the age of the householder is 65 years of age or older. Oversight is
uncertain how many would be exempt from increases in assessed value.
In addition, Oversight assumes there could be a saving to General Revenue from a reduction the
amount of Senior Citizen Property Tax Credits claimed. Oversight will show a range of impact
of $0 (no reduction) to an unknown savings.
Oversight will show a range of impact of $0 (not voter approved) to an unknown loss in
property tax revenue from property tax exemptions for age qualified taxpayers to local political
subdivisions.
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 assumes there could be costs for implementation and computer programming.
Oversight will show an unknown cost to county assessors to implement this proposal 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.
Officials from the City of Kansas City assume a negative fiscal impact of an indeterminate
amount. L.R. No. 3064H.01I
Bill No. HJR 78
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January 23, 2024
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Officials from the City of Springfield anticipate a negative fiscal impact of an undetermined
amount.
Officials from the City of Osceola assume anticipate a fiscal impact of an undetermined amount.
Officials from the St Louis Budget Division note according to the City of St. Louis Assessor’s
Office, the passage of this legislation would result in less revenue from City Property taxes.
Limiting the CPI to 2% and freezing assessments for owner occupied properties for owners over
65 would result in approx. $716,000 in lost revenue to the City. Both the Assessment fund and
the Collector of Revenue fund would also lose revenue as shown below. Please see the attached
worksheet for a further explanation.
Potential Revenue LossProp Taxes (all jurisdictions)$3,557,400City Prop Taxes$715,967Fee to Collector Fund$53,361Fee to Assessment Fund$22,234
Officials from the Newton County Health Department assume there will be a negative fiscal
impact on the Newton County Health Department depending upon the number of properties with
decreased assessments due to property owners meeting the criteria of this bill.
Officials from the Howell County Assessor assume the cost of programming, additional staff
and maintenance is estimated between $15,000 and $35,000 year 1 and will average $10,000 to
$30,000 each year this is in effect.
Officials from the Eureka Fire Protection District (EURE) - St. Louis assume this could
provide an impact to increased value on increases due to reassessment on approximately 10% of
the district’s housing stock. Not knowing what the potential impact of reassessment, the district
cannot provide a projected value.
The County Employees’ Retirement Fund (CERF) has reviewed HJR 78 (3064H.01I).
CERF’s review of this bill would indicate that it may result in reductions in contribution revenue
to CERF of an unknown amount annually. A certain portion of the moneys that are used to fund
the County Employees’ Retirement Fund are tied to the collection of property taxes. Data is not
available to quantify how changes to real property assessments under HJR 78 would impact
contribution revenue but CERF assumes there may be a negative impact.
Officials from the Phelps County Sheriff, Kansas City Police Dept., and the St. Louis County
Police Dept, 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 localities. L.R. No. 3064H.01I
Bill No. HJR 78
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January 23, 2024
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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 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 (MOLIS) database is available upon request.
FISCAL IMPACT – State GovernmentFY 2025
(10 Mo.)
FY 2026FY 2027GENERAL REVENUETransfer Out - SOS - reimbursement of
local election authority election costs if
a special election is called by the
Governor
$0 or (More
than
$8,000,000)$0$0
Cost Avoidance – possible reduction in
the amount of Senior Property Tax
Credit claims $0$0
$0 or
Unknown
ESTIMATED NET EFFECT ON
GENERAL REVENUE
$0 or (More
than
$8,000,000)$0
$0 or
Unknown
BLIND PENSION FUND Revenue Gain - from an unknown
impact on assessed values if values are
based on compensation received$0$0
$0 or
Unknown
Revenue Loss - loss of property tax on
property that appreciates more than the
change in CPI or 2%$0$0
$0 or
(Unknown) L.R. No. 3064H.01I
Bill No. HJR 78
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January 23, 2024
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FISCAL IMPACT – State GovernmentFY 2025
(10 Mo.)
FY 2026FY 2027Revenue Loss - from a possible
difference in assessed value of property
from age-qualified taxpayers relative to
current law$0$0
$0 or
(Unknown)
ESTIMATED NET EFFECT ON
THE BLIND PENSION FUND$0$0
$0 or
(Unknown)
FISCAL IMPACT – Local GovernmentFY 2025
(10 Mo.)
FY 2026FY 2027LOCAL POLITICAL
SUBDIVISIONS
Transfer In - Local Election
Authorities - reimbursement of election
costs by the State for a special election
$0 or More
than
$8,000,000
$0$0
Costs - Local Election Authorities -
cost of a special election if called for by
the Governor
$0 or (More
than
$8,000,000)$0$0
Costs - County Assessors - computer
programing, administrative costs, and
implementation and monitoring of
assessed value increase exemptions on
certain properties$0$0
$0 or
(Unknown)
Revenue Gain - from an unknown
impact on assessed values if values are
based on compensation received$0$0
$0 or
Unknown
Revenue Loss - loss of property tax on
property that appreciates more than the
change in CPI or 2%$0$0
$0 or
(Unknown)
Revenue Loss – from assessed value
increase exemptions for age-qualified
taxpayers$0$0
$0 or
(Unknown) L.R. No. 3064H.01I
Bill No. HJR 78
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January 23, 2024
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FISCAL IMPACT – Local GovernmentFY 2025
(10 Mo.)
FY 2026FY 2027ESTIMATED NET EFFECT ON
LOCAL POLITICAL
SUBDIVISIONS$0$0
$0 or
(Unknown)
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
Upon voter approval, beginning January 1, 2025, this proposed Constitutional amendment
provides that the true value of all residential real property shall be deemed to be the same value
determined at the most recent previous assessment of the property, or if the property has been
sold since its most recent assessment, the true value of such property will be deemed to be the
total fair market value of the compensation received by the seller for the sale of such property.
This Constitutional amendment shall apply to all residential real property that:
(1) Has been maintained by the homeowner as his or her primary residence; or
(2) Has been owned, used, or occupied by an owner who is 65 years of age or older, is liable for
the payment of real property taxes on the residence, and is an owner of record or has a legal or
equitable interest in the property as evidenced by a written instrument.
When a new assessment or reassessment of residential real property is conducted, the assessed
valuation of such property may be increased from the assessed valuation of such property
determined at its most recent previous assessment but only to the extent that such an increase:
(1) Incorporates the change in the Consumer Price Index since the most recent previous
assessment or up to a 2% annual increase in the assessed valuation of the property, whichever is
less; or
(2) Reflects the value added to the property as a result of new construction or improvements
made to the property as follows:
(a) Such value shall be the actual cost of the materials purchased for improvements;
(b) Documentation of actual costs shall be sent to the assessor after the completion of the new
construction or improvements;
(c) Such documentation of costs or other documents shall not be made available and shall be
used only by the assessor for the sole purpose of establishing the true value of the property.
In the event that residential real property is sold, the title company of the purchaser of any such
property must send to the assessor, as soon as reasonably practicable after the purchase, a L.R. No. 3064H.01I
Bill No. HJR 78
Page 11 of 12
January 23, 2024
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notarized copy of the sales contract of the property, and such document shall be considered a
closed record under state law.
Taxpayers who reach the age of 65 during a tax year shall be exempt from any increases in the
assessed valuation of their real property, provided that such property is used and occupied as
their primary residence. The valuation of real property for these age qualified taxpayers shall be
based on the most recent assessed valuation of their primary residence for the tax year
immediately preceding the year in which the age-qualified taxpayer became eligible for the
exemption.
If an age-qualified taxpayer acquires residential real property after reaching the age of 65 or
older, the assessed valuation of the newly acquired real property shall be based on the most
recent assessed valuation of the real property before the tax year that the age-qualified taxpayer
became eligible again for the exemption, so long as it has been established that the newly
acquired property is being maintained by the homeowner as his or her primary residence.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space. L.R. No. 3064H.01I
Bill No. HJR 78
Page 12 of 12
January 23, 2024
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SOURCES OF INFORMATION
Department of Revenue
Office of Administration - Budget and Planning
State Tax Commission
Department of Social Services
Office of the State Auditor
City of Kansas City
City of Springfield
City of Osceola
St Louis Budget
Newton County Health Department
Howell County Assessor
Eureka Fire Protection District (EURE) - St. Louis
County Employees’ Retirement Fund (CERF)
Phelps County Sheriff
Kansas City Police Dept.
St. Louis County Police Dept
Julie MorffRoss StropeDirectorAssistant DirectorJanuary 23, 2024January 23, 2024