Members of the House Special Interim Committee on Property Tax Reform, chaired by state Rep. Tim Taylor, fifth from right, listen to testimony at a hearing Wednesday in Macon. (Rudi Keller/Missouri Independent)
MACON — Separate tax rates for the four classes of taxed property would protect homeowners from large tax increases during reassessment, Chariton County Assessor Darrin Gladbach told a special Missouri House interim committee at its final field hearing.
If residential, commercial, farm and personal property each had a separate rate, any rate cuts due to growth above inflation would be confined to the classification where the growth is occurring, Gladbach said.
That is because when residential values rise faster than appraisals of commercial or farm property, it shifts the burden to homeowners because the Hancock Amendment was written so total property tax revenue growth doesn’t exceed inflation.
“Either the overall valuation does not go up enough to trigger a rollback, or if it does trigger a rollback, all the other subclasses also benefit from that rollback,” Gladbach said.
St. Louis County is the only county to separate property by subclass under a law making it optional.
Gladbach was the first person to testify Wednesday evening to the Special Interim Committee on Property Tax Reform. The committee is looking at how rates are set, what share of true market value should be taxed and what needs to change to make property taxes simpler to understand and pay. It previously took testimony in Jefferson City, Lebanon, Kansas City and St. Louis.
More than 100 people attended the hearing where, over the course of three hours, the 20-member committee heard from county officials and residents of north Missouri on what would make property taxes fairer, where assessments reflect actual values and rates reflect the constitutional limits on revenue growth.
Aggravation over higher property tax bills, fueled in part by a push at the State Tax Commission to get assessors to recognize higher land and building values, has held the attention of state lawmakers for the past two years.
On Monday, elected officials from five counties who have refused commission orders to raise property valuations sued to block it from withholding funds that help pay for assessment activities.
During testimony that closed out the hearing, tax commission Chairman Gary Romine endorsed Gladbach’s proposal to tax each subclass of property at a separate rate.
“Assessed valuations going up should not be an increase in the constituents taxes,” Romine said.
One reason the tax commission has pushed assessors to make increases is to bring appraised values closer to actual market value, especially for residential property. But every appraisal is a guess, based on the sales price of comparable properties, and Missouri does not require sellers to report the value of the property as it is sold.
Romine said the commission has pushed for years for the legislature to enact a law requiring a certificate of value to be filed with the deed transfer.
“But we also realize that that data has to be protected, and it’s no secret the Realtors Association will kill any kind of (certificate of value) bill, if it gets out there, unless we can find a way to protect that data,” Romine said.
Lawmakers have tried to respond to constituent upset over property taxes with measures that allow local voters to freeze tax bills for people over 65, and, during a special session in June, put in place caps on the growth of individual tax bills in 97 of the state’s 114 counties.
But freezes and caps on bills can have the effect of shifting the burden to property not sheltered by the new laws because revenues for the 2,807 local government agencies that impose property taxes are allowed to increase by the rate of inflation and the value of new construction.
“When we freeze an area, the ones left in the pool pick up the slack, because we’ve got these fire districts and ambulance districts in rural Missouri, and the cost of funding is not going down,” Gladbach said.
Lawmakers provided lower-income seniors and people with disability more property tax relief during the regular session this year. The tax bill that eliminated taxes on capital gains also increased the income limits and credit amounts for the elderly and people with disabilities who use the Circuit Breaker tax credit and, in June, put in place caps on the growth of tax bills in 97 of the state’s 114 counties.
The committee will meet again next Wednesday in Jefferson City as it takes the information from five public hearings held around the state and works on a bill to introduce for the 2026 legislative session, said state Rep. Tim Taylor, the Republican from Boonville who is chairman.
The committee may meet several times in early September if there is a special session on congressional redistricting, he said.
“It’s my goal to try to have this meeting over the public testimony in that week in Jefferson City, on whatever time frame, if it comes to fruition,” Taylor said. “And it would be my goal to even have one more after that, prior to December, so we might try to sit down and get a bill.”
The questions the committee must answer include whether constitutional changes are needed, whether the percentages of appraised value subject to tax should be changed and whether the tax commission should be expanded beyond three members.
“Part of the reason why I got this job is because I knew how complicated it was, and I complained that it was too complicated,” Taylor said. “So the speaker said, ‘well, if you want to complain, maybe you should try to help fix it.’”
Tax Commission lawsuit
The Missouri State Tax Commission provides oversight to the work of local assessors in 114 counties and the city of St. Louis. It sets the amounts used as the productive value of farmland, oversees the taxation of railroads and utility property, and is a place where owners can appeal property values when dissatisfied with the outcome reached by local boards of equalization.
In the lawsuit filed Monday in Polk County, officials in Audrain, DeKalb, Pike, Polk and Reynolds counties accuse the commission of exceeding its authority by demanding large jumps in assessed value and imposing impossible timelines.
Each county has received what the commission calls equalization orders, directing them to boost property values for real estate by up to 15%.
The commission’s orders “are an effort to force clerks, assessors, and boards of equalization to raise residential property assessments in an arbitrary and capricious manner without providing proper notice to the taxpayers affected by the increases,” the lawsuit states. “Upon information and belief, (the) commission has been made aware of this timing issue regarding the required notice to taxpayers and has failed to address these concerns.”
Members of the tax commission declined to comment on the lawsuit when asked at the interim committee hearing.
Local assessors are required to assign new values to all property in odd-numbered years, a process called general reassessment. The tax commission wants the values to fall between 90 and 110% of the true market value for the particular type of property.
When assessment increases are likely to cause tax bills to go up, notices must go out by June 1. Individual property owners are given a chance to appeal the new value to the local Board of Equalization, where they can argue over the price of comparable properties, or that factors such as age or storm damage make the valuation inaccurate.
Once the total value of all property in a taxing district is set in July, the governing boards calculate the impact on rates and set a public hearing. The rates for the year are set by Sept. 1 after public hearings.
DeKalb County, home to 42 taxing entities, was issued an equalization order dated July 22 demanding that it increase commercial assessments by 15%. That was too late to allow for appeals, County Clerk Melissa Meek said in an interview with The Independent.
The result, she said, would have been for the affected businesses to pay their taxes under protest, freezing the funds until appeals were resolved.
“I begged them to rescind their order and do it next year in a timely manner,” Meek said. “The patrons, the business owners, could meet with the Board of Equalization and they could bring their comps for comparable sales, and they could say why they shouldn’t have to pay and then let the (board) decide if the 15% increase was valid or not. But they didn’t give anybody that opportunity.”
The tax commission hasn’t formally threatened DeKalb County’s funding for assessment costs, which Meek said is about $25,000 a year. But the lawsuit says the commission is threatening to withhold more than $250,000 from the other four participating in the case.
Audrain County stands to lose $51,275. When the tax commission ordered the county to raise assessments, it did so by 12%. The commission demanded 15%, the lawsuit states.
Pike County would lose $47,180 because the commission determined that residential assessments decreased 0.72% versus a demand that they rise 13 to 15%.
Polk County would lose $65,406 in fiscal 2026 funding and denied $24,762 remaining from its fiscal 2025 allocation if it does not boost residential assessments by at least 14.99%.
Reynolds County was directed to raise residential land values and residential improvements by 15% or lose $34,329 in fiscal 2025 and another $34,527 for fiscal 2026.
The orders would force assessors to violate the law because any property where the value increases by 15% or more must be evaluated from the exterior in an inspection. The commission’s order to add the increase to any locally determined value for all residential properties would force assessors to violate the law, the lawsuit states
Along with forcing assessors to violate the law, blanket increases in assessments do not take into account individual conditions. Values may not change much, if at all, for properties in poor condition or in undesirable locations, the lawsuit states.
“The equalization orders specifically are discriminatory to taxpayers owning low-value properties in that a 15% increase will cause those properties to be assessed higher as compared to their market value than other properties within the counties,” the filing states.
Only the local assessor can know where it is appropriate to set higher values and which properties have not changed, Meek said.
“We know our county,” Meek said. “We know what our people can do and what they can’t do.”
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