ST. LOUIS — A push to slash Missouri's personal property taxes is poised for a vote in the state Senate and could come with a steep price tag for local governments.
State Senator Bill Eigel (R-Weldon Spring) is running for governor in the 2024 GOP primary. His proposal could bolster his credentials as a small-government fiscal conservative.
"We have the third highest rate of personal property tax anywhere in the country," Eigel said.
His proposal would lower the personal property tax rate from 33.3% to 31% and includes a depreciation schedule that would lower the market value of your vehicle over time, ultimately driving your tax bill down to $0 after 10 years.
"Entities that rely on these tax dollars are watching this bill closely," St. Louis Assessor Michael Dauphin said. "The zoo, the museum districts, the school districts, they stand the most to lose in this."
In St. Louis County, 53% of the personal property tax revenue goes to local school districts.
While the state legislature has the power to cut the tax, one nonpartisan estimate predicted local governments would take a $454 million dollar hit.
Dauphin's office sets your tax rate when you declare your personal property, but he said their discretion is limited by constraints in state law.
"The assessors in the state of Missouri are required by statute to use the National Auto Dealers Association valuation guide," he said. "And so that doesn't really give us much leeway or discretion when it comes to placing a value on a vehicle we just plug in the VIN number and it shoots out the value."
That system resulted in unusual scenarios during the post-pandemic economy. When the supply chain dried up, used car prices shot up and raised personal property taxes on older vehicles.
Dauphin called it a "tough pill to swallow" when the government raises your personal property tax rates during a period of inflation.
He said if the current proposal becomes law, it could blow a big hole in the city budget.
"I can confidently say over half the vehicles in the city of St. Louis are 10 years or older," he said.
The city of St. Louis collects more than $110 million a year in personal property taxes on vehicles, accounting for about three to four percent of the whole city budget.
City budget officials say they are taking the legislative push seriously and have already begun preparing backup plans if the state eventually cuts local government revenue streams.
Eigel was undeterred by remarks from Senate Republican Leader Caleb Rowden last week, who suggested such a massive tax cut could have the ultimate effect of defunding police or fire departments.
"We're still hoping for it to come up for a final vote this week," Eigel said.
Dauphin encouraged residents of St. Louis to go online to the city website and declare their personal property for tax assessment before the April 1 deadline.