Property Tax Freeze Provisions in SB3: What You Need to Know!

Introduction

Senate Substitute No. 2 for Senate Committee Substitute for Senate Bill No. 3 (SB3) is a legislative measure that includes provisions for property tax relief in designated “five percent” and “zero percent” counties. These provisions, detailed in Section 137.1120, aim to limit or freeze property tax increases for eligible taxpayers, subject to voter approval. This article examines the mandatory ballot placement process, the legislature’s flexibility to alter the freeze, potential methods to enhance its permanence, strategies counties might employ to avoid compliance, the impact of April elections on passage likelihood, and the opposition from county officials due to reliance on property tax revenue.

Eligible taxpayers are defined as Missouri residents who meet the following criteria:

• They must own or have a legal/equitable interest in a homestead (their primary residence), evidenced by a written instrument.
• They must be liable for paying real property taxes on that homestead.
• The homestead must be their primary residence, with no multiple claims allowed.
• They must reside in a designated “five percent county” or “zero percent county,” based on population ranges.
• They cannot claim another property tax credit under section 137.1050 for the same property.
• The credit requires voter approval in their county by April 2026.

Mandatory Ballot Placement

Section 137.1120 of SB3 mandates that by no later than the municipal election in April 2026, each eligible county must place a ballot question before voters to determine whether to grant a property tax credit. This credit would limit tax increases to 5% or the Consumer Price Index in “five percent counties” or freeze taxes at 2024 levels in “zero percent counties,” with exceptions for voter-approved levies, new construction, or annexation. The use of the term “shall” in the legal text establishes a non-discretionary obligation, ensuring that counties are legally required to present this question to voters. Failure to comply could result in legal action from the state or other stakeholders, reinforcing the mandatory nature of this requirement.

Legislative Flexibility and Potential to Change SB3

The property tax freeze provisions in SB3 do not include a sunset clause, meaning that once approved by voters, the freeze remains in effect indefinitely unless modified or repealed by future legislation. This absence of an expiration date provides a degree of permanence, but the Missouri General Assembly retains full authority to amend or repeal these provisions through the standard legislative process, which requires a simple majority vote in both chambers and the Governor’s signature or a veto override.

The legislature’s flexibility to alter the freeze is facilitated by the lack of protective mechanisms in the bill. For instance, there are no requirements for a supermajority vote or voter approval to change the provisions. This leaves the property tax freeze vulnerable to future legislative adjustments, such as altering eligibility criteria, capping credit amounts, or eliminating the program entirely.

To make the freeze more permanent, the legislature should have implemented several strategies:

• Supermajority Requirement: Mandating a two-thirds vote in both chambers to amend or repeal the provisions, increasing the threshold for changes.
• Constitutional Amendment: Enshrining the freeze in the Missouri Constitution, requiring voter approval for any modifications, as seen in other states for significant tax policies (Ballotpedia: Laws governing local ballot measures).
• Referendum Process: Requiring voter approval in affected counties for any changes, ensuring local control and democratic oversight.
• Extended Sunset Clause: Setting a long-term expiration date (e.g., 50 years) to provide stability while allowing future review.

The absence of these measures means that the property tax freeze, while potentially long-lasting, is subject to the regular legislative process, allowing for relatively straightforward modifications.

County Resistance Strategies

Despite the mandatory requirement to place the property tax freeze on the ballot, counties might explore ways to avoid or delay compliance, though such efforts are unlikely to succeed legally due to the clear language of SB3. Potential strategies include:

1. Legal Challenges: Counties could argue that the law is unconstitutional or imposes an undue burden on local governments. For example, they might claim that the mandate violates local autonomy or lacks sufficient state funding to cover administrative costs. However, the state’s broad authority over taxation matters makes such challenges unlikely to prevail, as courts typically uphold state mandates in this area (Ballotpedia: Laws governing local ballot measures).
2. Administrative Delays: Counties might cite logistical issues, such as insufficient resources, staffing shortages, or time constraints, to delay placing the measure on the ballot. While this could temporarily postpone compliance, it would not legally excuse non-compliance, and courts or state officials could intervene to enforce the mandate.
3. Legislative Intervention: Counties could lobby the state legislature to amend or repeal SB3 before the April 2026 deadline, relieving them of the obligation. This is speculative and depends on political dynamics, making it an unreliable strategy for counties.

Any attempt to avoid compliance would likely face legal repercussions, as the state could pursue enforcement actions to ensure counties meet the ballot placement requirement. The mandatory nature of the law, combined with Missouri’s legal framework, limits the feasibility of these resistance strategies.

Impact of April Elections

The requirement to place the property tax freeze on the ballot during the April 2026 municipal election introduces challenges due to typically low voter turnout in Missouri’s off-cycle elections. For example, the August 2016 primary election saw a turnout of approximately 25%, significantly lower than November general elections, which often exceed 50% during presidential years (AP News: Missouri primary turnout).

Several factors contribute to lower turnout in April elections:

• Lack of High-Profile Races: April elections typically focus on local issues or municipal races, which attract less voter interest compared to national or state-wide elections in November.
• Voter Awareness: Limited media coverage and public engagement in April elections can reduce voter awareness, leading to lower participation (Missouri Census Data Center: Voter turnout).
• Weather Conditions: April weather in Missouri can be unpredictable, with rain or other conditions potentially discouraging voters from going to the polls.

Low turnout can lead to a less representative electorate, potentially skewing the outcome of the property tax freeze vote. Low participation could reduce the measure’s chances of passing, especially if it requires a majority vote. This dynamic could disadvantage the property tax freeze, as achieving broader community support may be more difficult in a low-turnout election.

County Officials’ Opposition to the Property Tax Provisions in SB3

County government officials frequently oppose property tax cuts or freezes due to their reliance on property taxes as a primary revenue source for funding essential services, including schools, emergency services, and infrastructure. In Missouri, property taxes are a critical component of local budgets, and reductions can lead to significant fiscal challenges.

For example, in 2023, legislation to phase out personal property taxes faced opposition from the Missouri Municipal League, Missouri Association of Counties, and emergency service providers, who argued that such cuts would severely impact their budgets (The Beacon: Personal property tax cuts). Similarly, in St. Louis, officials highlighted that property tax reductions could result in substantial revenue losses, affecting services like schools and public safety (St. Louis Post-Dispatch: Property assessments).

This opposition reflects the tension between taxpayer relief and the need to maintain local services. County officials, tasked with balancing budgets, often view property tax freezes as threats to fiscal stability, potentially forcing cuts to critical programs or necessitating alternative revenue sources.

Constitutional Concerns with SB3. Will the “Show-Me Sports Investment Act” Doom it?

The “Show-Me Sports Investment Act” (Section 100.240) raises significant constitutional concerns under the Missouri Constitution, as highlighted by Ron Calzone’s analysis of similar legislation. These concerns center on three provisions:

1. Article III, Section 38(A): Prohibition on Granting Public Money to Private Entities
   • Text: “The general assembly shall have no power to grant public money or property, or lend or authorize the lending of public credit, to any private person, association or corporation, except for the purposes of charitable, educational, penal or reformatory institutions, or for the aid of the poor and disabled.”
   • Application: The act provides state funding and tax credits for athletic facilities, primarily benefiting private professional sports franchises (e.g., Kansas City Chiefs and Royals). These franchises are private corporations, and the funding does not fall under the exceptions listed. This could violate Section 38(A), as the primary beneficiaries are private entities, not the public.
   • Analogy: A Nevada lawsuit challenged public funding for the Oakland A’s stadium, arguing it violated the state constitution by prioritizing private interests (ESPN). Missouri’s stricter prohibition suggests a strong case for unconstitutionality.
2. Article III, Section 39(5): Prohibition on Releasing Indebtedness Without Consideration
   • Text: “The general assembly shall not have power: (5) To release or extinguish or to authorize the releasing or extinguishing, in whole or in part, without consideration, the indebtedness, liability or obligation of any corporation or individual due this state or any county or municipal corporation.”
   • Application: The tax credits, offering 50% of contributions up to $50 million, could be seen as reducing tax obligations without adequate consideration. While economic benefits (e.g., jobs) might be argued as consideration, these are speculative and indirect, potentially failing to meet constitutional standards.
   • Potential Violation: Courts would need to assess whether the economic activity constitutes sufficient consideration, but the direct benefit to private contributors suggests a violation.
3. Article III, Section 40(3): Prohibition on Local or Special Laws
   • Text: “The general assembly shall not pass any local or special law: … (30) where a general law can be made applicable, and whether a general law could have been made applicable is a judicial question to be judicially determined without regard to any legislative assertion on that subject.”
   • Application: The act is framed as a general law but targets MLB and NFL franchises, effectively benefiting only the Chiefs and Royals. This specificity could be deemed a special law, violating Section 40(3) if a general economic development law could apply.
   • Historical Context: The 1875 Missouri Constitution addressed the overuse of special laws, which favored well-connected entities (Harper, 1920). Courts may scrutinize the act’s intent to benefit specific franchises.

Conclusion

The property tax provisions in SB3 require voter approval by April 2026, with counties mandated to place the measure on the ballot. The legislature’s flexibility to amend or repeal the freeze, combined with the lack of protective measures, leaves it vulnerable to change. Counties may resist through legal or administrative means, but compliance is likely enforced. Low turnout in April elections could hinder passage, and county officials’ opposition reflects fiscal concerns. The “Show-Me Sports Investment Act” faces significant constitutional challenges under Missouri’s Constitution, particularly for granting public funds to private entities and potentially constituting a special law. These issues, highlighted by Ron Calzone, suggest that SB3 could face legal scrutiny, impacting its implementation and longevity.