JEFFERSON CITY - Senior citizens would see tax breaks on their property taxes, under a bill initially approved by the Missouri Senate Thursday.
The homestead measure calls for property tax increases to be capped at 5 percent a year for those 65 and over. Anything greater could be returned to seniors in the form of a tax credit they would apply for with their county assessor.
To be eligible for the program, individual seniors must earn less than $50,000 a year, and couples less than $54,000. This would greatly expand the pool of applicants compared to the current "circuit breaker" law, where low-income seniors can qualify for tax refunds only if they earn less than $25,000, or $27,000 respectively.
However, the "circuit breaker" program is an actual tax refund from the state -- meaning seniors who qualify are guaranteed to get a check from the government. The Senate proposal, on the other hand, would require the Missouri legislature to appropriate money to fund the tax credit program each year. If the funding is not approved, seniors will not see any money.
Sen. Chuck Gross, R-St. Charles, who is sponsoring the measure, said he is confident the legislature will fully fund the program if it passes. However, Gross said the cost of the program is still "unknown."
The cost to individual counties could be considerable, as the training of personnel and processing of seniors' claims for the tax credits would require extra work by already burdened county assessors and collectors. The Senate bill does provide a way of reimbursing the counties for such work, by taking a percentage of the money appropriated by the General Assembly for the tax credits and giving it back to the counties.
The counties' cut of the money, however, is also contingent on the legislature actually allocating money for the homestead program. If it does not, counties could be left holding the bag for processing costs they already incurred.
"But they're okay with that," Gross said, indicating he had received the support of county assessors.
With no estimate yet of how much the program will cost, it remains unclear whether the homestead measure will gain approval by the General Assembly. Lawmakers have tried to pass similar bills in the past, but always faced the problem of how to pay for them.
"We've been at this for a long time," Gross said.
Gross said he believed the current Senate proposal held a better chance of becoming law than its predecessors, in part because it did provide a mechanism to fund the counties for their lost revenue.
The way the program would work is that:
-- a resident who qualified for the tax credit would apply at the county level, and pay their property taxes in full
-- the county would send along its information to the state Department of Revenue, which would calculate how much money was needed to fund the tax credits for all Missouri seniors who asked for them
-- the department would then tell the Missouri legislature how much needed to be appropriated
-- it would then be up to legislators to decide whether they wanted to approve the money
-- if they did, the state treasurer would then cut a check to the counties, and the seniors who applied would get their money
-- if they did not, no money would be dolled out
Gross said it was not an all or nothing proposition, and that for example legislators could decide to fund 50 percent of the tax credit program. In that situation, seniors would get reimbursed for half the cost of their property taxes above the 5 percent mark.