Greene County adopts retiree tax freeze despite lack of clarity from state

Despite some lingering confusion about how it will be implemented, the Greene County Commission voted Monday to follow the state's lead and freeze property taxes for Social Security retirees.

Senate Bill 190, signed July 6 by Gov. Mike Parson, authorized counties across the state to provide seniors receiving Social Security retirement benefits with property tax credits. The amount of tax credit received would be the difference between a given year's property tax and the tax on the property from the year in which the owner became eligible.

The bill received strong bipartisan support — passing in the Senate 33-1 and in the House 154-2.

There are two paths for tax benefits to be adopted in individual counties. One is the one Greene County took, with the county directly passing an ordinance; the other requires citizens to gather signatures in a petition that would place the question on the ballot. The latter option can be pricey.

"If this was not adopted at the commission level, it most assuredly would be put on the ballot by initiative petition, which would then cost the county probably $250,000 minimum to run the election and most likely it would pass," Presiding Commissioner Bob Dixon said at the Monday commission briefing.

Headache for counties across the state

The state bill went into effect Monday, opening the door for counties to begin discussing the tax credit locally. However, with the bill passing at the end of the legislative session, counties have been left guessing about a number of details. Dixon said a Missouri Association of Counties task force was established, chaired by the Greene County Collector of Revenue Allen Icet, for counties to figure out how to best implement the bill consistently and accurately.

"The important thing is that we have to abide by the law as it's written, even if it's unclear," Dixon told the News-Leader.

With the bill in effect, the tax freeze could be implemented this year. However, with how late things have begun and the requirements for tax bills to be sent out in early November, Dixon said that's impossible, especially with the county tasked to determine eligibility. Next year will likely be the first year that eligible seniors can take advantage of the freeze. Dixon said he is hopeful that the next legislative session will provide more clarity and detail on what the legislation truly intends to do and how to best implement it.

"The concern is not offering that relief, I think we all want to do that," Commissioner John Russell said. "The concern is the law is very confusing, and the logistics to get to this point are going to be difficult."

According to a Greene County Commission news release, several counties have asked Parson to call a special session in September of 2023 to provide further clarity.

Among the most confusing portions of the bill are the inconsistencies in language. While the ballot language that is established by the bill for use in sending the tax freeze to county voters includes relief for "senior citizens," the legislation itself outlines this as only applying to those receiving Social Security retirement benefits. These are not the same, Dixon said. The freeze, as it stands now, applies to property tax as a whole, not just the county's portion of it. The date as to which year should apply for the freeze is also unclear.

More: New round of tax cuts to income, corporate rates passes Missouri House

Dixon said about 2-5% of property taxes that individuals pay go to the county, the rest goes to other entities like schools, libraries and parks. These entities' revenues will see the biggest changes after the freeze goes into effect.

"They are going to be impacted. We don't know how much, it's impossible to know," he said.

Now, the county will continue to figure out how to implement the freeze and what it may look like in action.

The same bill also established maximum income tax deductions for all recipients of Social Security benefits, regardless of filing status and adjusted gross income. Previously, single tax filers who made more than $85,000 or those filing jointly who made more than $100,000 would have owed some income tax on Social Security.

Those eligible can start taking advantage of this new benefit for tax year starting January 2024. According to the U.S. Social Security Administration, individuals can become eligible for Social Security starting at 62 years old if they have paid into the system. This excludes some professions like teachers, ministers, civil servants, rail road workers and others, according to the news release.

This article originally appeared on Springfield News-Leader: Greene County senior property tax freeze receives commission approval