OUR OPINION: Senior tax relief law needs more work

The devil is always in the details.

Senate Bill 190, which sought to offer seniors tax relief, is certainly living up to the maxim that the particulars -- even the seemingly insignificant -- can end up causing problems.

In this instance, the legislation, which was signed by Gov. Mike Parson in July, lacks the details for how to implement and apply the tax relief.

The legislation seeks to offer seniors relief on their property and income taxes. The first part of the law authorizes counties to grant a property tax credit to eligible seniors; the second part eliminates income tax on Social Security benefits.

For the property tax credit to be available, counties would have to adopt ordinances authorizing the credits or residents would have to create petitions in support of the credits, which would then have to be approved by voters.

Under SB 190, once the credit is made available in a county, taxpayers could claim the tax credit if they are eligible for Social Security retirement benefits, own or have legal interest in a home and are liable for paying real property taxes on it.

The credit would essentially freeze the property tax at the time the county in which the property sits adopted the ordinance.

The sponsor of the bill said he was inspired to draft the legislation seniors in his district and around the state have seen dramatic increases in property tax assessments. Many of those seniors on fixed incomes are at risk of being forced out of their homes, or have already been forced out, because they cannot afford the taxes, he said.

SB 190 seemed like a straightforward bill.

But the bill, as signed and enacted, has left county collectors and Missourians with a lot of questions about the details.

Not everyone receives Social Security. Would retirees such as teachers and railroad workers who have retirement plans other than Social Security be eligible for the credits?

What is the age of eligibility? Seniors can start receiving Social Security benefits as early as 62, but full retirement benefits don't kick in until 66 or 67, depending on what year the person was born.

What if one of the homeowners is eligible, but the other is not; would the credits be granted?

Would potential lost revenue for taxing entities be confined only to the county's taxes or would it affect each city, township, fire department, school district and other entities as well?

In some counties, the lost revenue to those taxing entities could be devastating. For instance, in Cole County, 70 percent or more of the taxes the county collects goes to school districts.

These questions and others must be addressed for the law's property tax relief to work. Thankfully, collectors have seen the value of the legislation and have offered to help legislators find a path toward success. One would think much of the uncertainties of the bill might have been avoided if the conversations had happened during the drafting and vetting of the bill.

The second part of SB 190 seems more straightforward and would be welcome relief for seniors.

Missouri was one of only 12 states that taxed seniors' Social Security income. SB 190 would change that.

Eliminating that income tax on Missouri's seniors was a good move that will have a direct effect on seniors who are struggling to make ends meet.

If seniors are wondering when they might start seeing benefits from SB 190, the answer is it could be a while. Counties are holding off on passing ordinances in support until the law is further clarified.

We look forward to the Legislature tidying up this legislation when it returns next session.

-- News Tribune

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