Personal property tax increases, such as those on vehicles, could be limited under legislation the Missouri House passed 90-54 on Wednesday.
Under current law, personal property valuations are not subject to limitations authorized by the Hancock amendment – a measure approved by voters in 1980 that limits the amount of money that can be gathered through taxes – or the Consumer Price Index.
"It will be treated the same as real estate," said Rep. Mike McGirl, R-Potosi, the bill's sponsor. "I look at it as a fairness issue for our constituents and our taxpayers."
If personal property values go up significantly, Missourians' tax bills can also increase. That has happened consistently since 2020, McGirl said.
"It's creating a windfall for these political subdivisions," McGirl said during first-round approval last week.
Rep. Ben Keathley, R-Chesterfield, echoed McGirl's sentiment, pointing to the increase in personal property tax bills during the COVID-19 pandemic when vehicle value increased significantly.
"Your car value didn't just go up by phantom amounts before COVID," Keathley said. "Your car went down in value unless you did something dramatic to improve it."
That can be dismissed as a "bubble," said Rep. Kathy Steinhoff, D-Columbia, who added that her county has occasionally seen a decline in the personal property tax revenue that goes toward schools.
"We have plenty of problems to worry about at the state level," Steinhoff said. "But right now, we are playing in every single one of your communities."
When the bill was heard in committee, Steinhoff and McGirl disagreed about the necessity of personal property tax revenue, which makes up a significant portion of some local budgets.
"They save a little bit on (personal) property tax, but they end up having to pay more for their children to go to school because we've cut school funding, or the fire department can't get to their house," Steinhoff said.
Also during committee, at least one Republican expressed concern the legislation would be detrimental for the state's rural areas, where personal property tax revenue can take up bigger portions of a county's budget.
"Everybody hates taxes, but we do have to have them to operate," said Rep. Tony Harbison, R-Arcadia, who, like McGirl, represents part of Washington County. "It's hard to do a one-size-fits-all."
Harbison ultimately voted against the bill.
Only a few Democrats voted in favor of it.
Rep. Kemp Strickler, D-Lee's Summit, said he was concerned about the potential loss of revenue to taxing districts but ultimately decided to vote yes.
"My school district, I don't think it will substantially impact them as long as we don't have another COVID pandemic," Strickler said.
The legislation, HB 1766, will next move to the Senate.
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