A Republican state lawmaker plans to reintroduce a bill this year that would allow senior citizens to stop paying property taxes on their homes.
The measure, known as True Homeownership, would authorize a tax reduction to be phased in over five years that would eliminate property taxes on a senior citizen’s primary residence.
The proposal from GOP Representative Bill Kidd of Independence specifies that a senior citizen or his or her spouse must be eligible for full social security retirement benefits the year prior to receiving the assistance. It would also require the senior to have owned his or her home free and clear for at least two years.
Kidd says too many fixed-income seniors in his district are burdened by higher property tax obligations than what their mortgage payments were.
“They’re out of debt. They live in the community. They’ve paid their taxes all these years. They’ve paid property taxes, school taxes, you name it,” says Kidd. “They’ve paid everything they’ve done. And now we’re going to tax them out of their property.”
The two-term Missouri House member says property taxes ensure that citizens never own their homes, but effectively pay rent to the county government because the property would go to foreclosure if the taxes aren’t paid.
“If we take your house away for the taxes, who really owns your house? You don’t,” Kidd says. “You never own your property. Under our current system, you never own your property.”
Kidd acknowledges that reducing or eliminating property taxes for a segment of the population will impact K-12 education because those levies largely support local public schools.
He says research he’s conducted reveals that his bill would lead to a statewide reduction in money for public education of between $75 million and $300 million annually. Part of that calculation is based on a previous version of the bill which offered a tax credit, or refund of taxes paid instead of his current plan to offer an outright reduction.
A quick sampling of Missouri school administrators predictably reveals concern over Kidd’s proposal.
Branson Schools is one of the larger districts in the state that relies heavily on local property taxes. Branson Superintendent Brad Swofford says the district receives nearly 70% of its funding from local sources, mostly property taxes, while the state contributes 20% and the federal government chips in 10%.
He says finding money for public education is hard enough without the burden Kidd’s proposal would place on schools.
“Throughout the last few years the legislature has done a nice job to fully fund the (Education Foundation) Formula, but that hasn’t come without great effort,” says Swofford. “Seventy-five to 300 million (dollars) would be a significant impact on that.”
Swofford suggests Kidd’s legislation could see opposition from educators, including from his district.
“We would certainly be concerned about that bill moving through, simply because it would have a significant impact on our district, and most importantly the education of our kids. That would be concerning.”
The Blair Oaks District serves the area in and around the town of Wardsville, roughly eight miles south of Jefferson City in mid-Missouri. Superintendent Jim Jones says it’s one of the fastest growing districts in the state, having grown from 500 to more than 1,200 students in the 20 years he’s been there.
Jones notes the bedroom community Blair Oaks serves is only 4% composed of commercial property. Commercial property is assessed at a higher percentage rate than residential property. With such a small portion of property tax revenue coming from commercial property, residential property taxes take on a bigger responsibility to finance local education. Jones stated that 51% of the district funding is supplied by local sources including property taxes.
He thinks Representative Kidd’s proposal to eliminate property taxes for senior citizens would force his district to make cuts to some programs.
“When sources are removed, ultimately there’s going to have to be some appropriations that are going to be lowered as a result,” says Jones.
Representative Kidd thinks the impact his measure would have on school funding is insignificant compared to the financial relief it would bring to senior homeowners.
“You finally get to own your house,” says Kidd. “So let’s quit worrying about what it’s going to do to the school district and start worrying about the seniors that we have sitting in houses that they never get to own.”
The True Homeownership proposal would authorize the phase-in of a 20% reduction in seniors’ property taxes annually over five years to equal 100%. The 2019 legislative session will mark the third year in a row Kidd has introduced a version of the bill. He’s confident it’ll move further toward passage than it has before.
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