Republican senator hopes to phase out personal property taxes

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JEFFERSON CITY, Mo. – Some Missouri senators are once again trying to cut personal property taxes.

Unlike years past, the legislation before a Senate committee Tuesday would allow the state to reimburse local governments for the revenue they missed out on because of the tax cut.

The proposal from Sen. Bill Eigel, R-Weldon Spring, who is running for governor and has sponsored similar legislation previously, would slowly phase out personal property taxes but several spoke against the bill in fear of the cuts that could follow.

“The genesis of these bills is being driven by the fact that the tax burden in the state is too high,” Eigel said to the committee Tuesday. “It would slowly lower the assessment rate on personal property tax so that, very candidly, you won’t have to pay rent to the government every December 1 for the crime of owning a car in the state of Missouri.”

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Another legislative session means another chance at doing away with personal property taxes. This year, Sen. Denny Hoskins, R-Warrensburg, who is running for secretary of state, is joining Eigel in cutting the annual tax Missourians pay on their vehicles, boats and campers.

“When I go across my district, they are upset they are paying higher personal property taxes on their 2010 Ford F-150 pickup truck than they did five years ago,” Hoskins said. “We need to give money back to our constituents; give some of that money back to the folks back at home so they can make the decisions on what they would like to do with their money.”

Personal property is currently assessed at a third of its real value, and then local governments tax that assessed value, which goes to funding local schools, libraries and fire districts.

Eigel said as revenues go up locally, his Senate Bill 733 would allow revenues to be offset by cuts to personal property tax, which would slowly reduce as the assessment rate was lowered.

This year’s version would allow for the state to reimburse local governments that would lose out on revenue because of the cut, but that would be up to the discretion of the legislature.

“About 20% of our revenue currently comes from personal property tax,” executive director of the Missouri Association of County Developmental Disabilities Services Nancy Pennington said. “We are worried about any loss of growth as the needs for services increase and the prevalence of things such as autism continues to grow.”

First responders also stressed to the committee their concerns about how to manage their budgets.

“The difficulty will be in association with how to manage the changes in the funding that will be associated with it,” St. Charles County Ambulance District Chief Kelly Cope said.

County assessors want the state to review the tax policy and structure before making a big decision.

“There are better ways to address our issue than piecemealing and doing some assessment caps that have a short-term effect and may have unintended consequences,” Howell County Assessor Daniel Franks said.

Eigel told the committee that this is the year the legislation should pass because the state’s financially in a good place.

“This provides an enormous amount of protection to local districts while at the same time ensuring that we will join 29 other states in not hammering in the middle-class working households every December 1 in the form of personal property tax,” Eigel said.

The Senate Economic Development and Tax Policy Committee did not vote on Eigel’s bill Tuesday but could in the coming weeks.

Similar legislation is set to be heard in the House in the coming weeks.

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