Section 28 Property Tax Rate Ceilings and Rollbacks

• Library: Tax Law 2009

Article X, § 22(a), of the Missouri Constitution also provides for a property tax rate rollback if the assessed valuation of property, excluding new construction and improvements, increases faster than the Consumer Price Index for a given year. If so, property tax rates must be reduced to “yield the same gross revenue from existing property, adjusted for changes in the general price level, as could have been collected at the existing authorized levy on the prior assessed value.” Mo. Const. art. X, § 22(a). Section 137.073, RSMo Supp. 2007, provides for a similar rollback on property tax rates and implements the § 22(a) property tax rollback requirement.

The maximum property tax rate that a Missouri political subdivision can impose in any year is termed the “tax rate ceiling” and, as a result of reassessment, may result in a rate rollback. Section 137.073 establishes the process and calculations for determining each political subdivision’s “tax rate ceiling.” Section 137.073 is designed to prevent windfalls to taxing authorities that would otherwise occur simply because of increases in assessed valuations. See Asarco, Inc. v. McHenry, 679 S.W.2d 863, 864 (Mo. banc 1984). The calculations established by § 137.073 are detailed, but generally they require a political subdivision to reduce a tax rate in a year when assessed valuation of existing property increases at a pace greater than the general rate of inflation. See § 137.073.2. The statute thereby protects taxpayers from increases in the amount of taxes they otherwise would pay if they were charged the same, preexisting tax rate on property that is now assessed at a greater value. Asarco, 679 S.W.2d at 864. A political subdivision’s “tax rate ceiling” is subject to revision in the summer of each year based on changes in...