HCS HB 517, 94, 149, 150 & 342 -- ASSISTANCE FOR THE ELDERLY

SPONSOR:  Portwood

COMMITTEE ACTION:  Voted "do pass" by the Committee on Senior
Security by a vote of 15 to 2.

This substitute:

(1)  Limits the increase in the assessed valuation to 5% on any
residence used as a homestead for taxpayers aged 65 years and
older with a household combined adjusted gross income of $39,000
or less.  This income level will be adjusted over time for
inflation.  There is an enrollment fee of $15, payable to the
local assessment fund each assessment cycle;

(2)  Prohibits any taxpayer from claiming both the senior citizen
property tax credit, commonly known as the circuit breaker, and
the homestead exemption;

(3)  Requires the state, through appropriations, to reimburse the
losses of any political subdivision caused by the homestead
exemption;

(4)  Exempts Social Security benefits from the state income tax
as of January 1, 2004;

(5)  Lowers the rebate for generic drugs for pharmaceutical
manufacturers participating in the Missouri Senior Rx Program
from 15% to 11% for drugs sold after July 1, 2003;

The substitute contains an emergency clause pertaining to the
rebate for generic drugs.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of $0 in
FY 2004, $0 in FY 2005, and Unknown in FY 2006.  Unknown cost is
expected to exceed $100,000 per year.  Political subdivision
reimbursement subject to appropriation and does not include
possible costs to fully fund Foundation Formula.  Net Cost to
Blind Pension Fund of $0 in FY 2004, $0 in FY 2005, and $0 to
$7,079 in FY 2006.  Estimated Net Savings to Senior Rx Fund of
$8,550,000 in FY 2004, $14,650,000 in FY 2005, and $15,400,000 in
FY 2006.

PROPONENTS:  Supporters of House Bills 517, 94, 149, 150, and 342
say that over 100,000 signatures were collected in support of
this measure.  Seniors are often on fixed incomes and are being
forced out of their homes by skyrocketing assessments, which are
out of control in some areas.  The homestead exemption would
allow seniors to budget for the future and encourage seniors to
support school bond measures.  It would provide tax relief to
seniors who have reliably paid taxes over the years and help
stabilize communities by keeping seniors in Missouri.

Testifying for House Bills 517, 94, 149, 150, and 342 were
Representatives Avery, Bivins, and Lembke (85); Silver-Haired
Legislature; Art Steiger; and Charles Jensen.

OPPONENTS:  Those who oppose House Bills 517, 94, 149, 150, and
342 say that the circuit breaker is a superior method of relief
and should be expanded.  Missouri has a low property tax rate,
and education is already underfunded with cuts to education from
state sources pending.  The bill would also restrict revenue at
the local level as well.  The bill would adversely affect the
foundation formula, would transfer the tax burden to other
taxpayers, needs to be means tested, and does not guarantee that
localities will be reimbursed for loss of future revenue.

Testifying against House Bills 517, 94, 149, 150, and 342 were
Cooperating School Districts of Suburban Kansas City; Missouri
State Teachers Association; St. Louis Schools; Missouri
Association of Realtors; Missouri National Education Association;
Missouri Council of School Administrators; Missouri School Boards
Association; Cooperating School Districts; Reeds Spring School
District; and Hubie Neutzler.

Other witnesses testifying on House Bills 517, 94, 149, 150, and
342 were the Missouri Assessors Association; and Missouri
Association of Counties.

Mark Pioli, Legislative Analyst

Missouri House of Representatives
Last Updated July 25, 2003 at 10:12 am