House on pile of coins
Patrick Tuohey

California’s Proposition 13 was enacted in 1978 as a reaction against high property taxes and some dramatic increases in tax assessments year over year. Prop 13 restricted annual increases in the assessed value of property, and state and local politicians have chafed under its restrictions for years—often blaming the proposition for their inability to raise revenue. Taxpayers, however, still support the measure. Now Missouri is considering something similar.

The recent spate of dramatic hikes in assessed value in Jackson County, in which Kansas City sits, is the reason for the renewed legislative interest. In addition to an excess of 14,000 formal appeals filed against Jackson County assessments by property owners, the county has drawn separate lawsuits from the ACLU and Legal Aid of Western Missouri.

As a result of this, there have been several bills introduced in the Missouri legislature that place caps on increases to a property’s assessed value. Several joint resolutions were introduced that would amend the Missouri Constitution along similar lines. One initiative petition would eliminate the ability of the state and localities to collect property taxes altogether.

Writers at the Show-Me Institute have written about problems with property tax assessments for years, going back at least a decade. There are many reasons for the situation at hand, including a determination by the State Tax Commission that assessments in Jackson County were too low. Another may be that taxing jurisdictions are struggling to provide services because economic development policies such as tax-increment financing and property tax abatements divert funds away from taxing jurisdictions and toward wealthy and well-connected developers. Kansas City area library systems have sought to increase their levies in recent years to address this. The Kansas City Public School district is uniquely exempt from having to reduce its levy when assessments go up—it will see an increase in revenue due to the new assessments.

Regardless of the cause for the increased assessments, cities and counties are likely to strongly object to any effort to curtail their ability to collect property taxes. They will talk about how doing so will harm their ability to fund basic services such as public safety and schools. Unfortunately, their practice of diverting tax dollars to private interests undercuts that claim. Local leaders must be dedicated to collecting public funds for public purposes or not collecting them at all—lest they face a Prop 13 of their own.

 

About the Author

Patrick Tuohey
Patrick Tuohey
Senior Fellow of Municipal Policy

Patrick Tuohey works with taxpayers, media, and policymakers to foster understanding of the conse