JEFFERSON CITY - Senior citizens are one step closer to seeing tax breaks on their property taxes, under a bill passed by the Missouri House of Representatives Wednesday.
The measure to create tax credits for Missouri seniors, originally sponsored by Sen. Chuck Gross, R-St. Louis, passed the Senate at the end of February and was sent to the House for consideration.
The House passed its version Wednesday. Because the House bill contained several differences, both chambers will iron out the distinctions in a conference committee before sending the measure to the governor.
"This is probably the most important thing we've done in several weeks," said Rep. Ron Richard, R-Joplin. "Seniors are getting taxed out of their homes."
The homestead bill 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.
One difference between the House and Senate bills is who is eligible for the program. Under the Senate plan, individual seniors must earn less than $50,000 a year, and couples less than $54,000.
Rep. Charles Portwood, R-St. Louis County, the House sponsor, said the bill passed Wednesday would allow seniors making as much as $95,000 to qualify.
Also, the Senate bill requires both spouses in a household to be above the age of 65, while the House bill would allow a household where either spouse was over 65 to qualify.
Both bills 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. Both homestead bills 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.
But supporters of the proposal say it is unlikely legislators would fail to fund the tax credit if it became law.
"I don't see how anyone could vote against funding it," Portwood said.
The cost of the credit 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. But both bills do 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 Gross, the Senate sponsor, said previously that county assessors had lent their support to the measure and were willing to deal with that possibility.
"They're okay with that," Gross said.
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