SB 190 explained: Osage County commissioners have a lot to consider

By Elise Brochu, Staff Writer
Posted 10/16/24

LINN — Osage County commissioners, the assessor’s office, and the collector’s office have received many calls over the past few weeks regarding Senate Bill (SB) 190, titled …

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SB 190 explained: Osage County commissioners have a lot to consider

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LINN — Osage County commissioners, the assessor’s office, and the collector’s office have received many calls over the past few weeks regarding Senate Bill (SB) 190, titled “Modifies provisions related to tax relief for seniors,” and how that may impact their real estate taxes. The short answer for Osage County residents is that it won’t — at least not at this time. Though a few counties have chosen to adopt the voluntary property tax relief outlined in SB 190 — and later modified in SB 756 — Osage County is among the many who have not.

Should commissioners adopt an ordinance implementing the tax relief, or if citizens petitioned to put it on the ballot and it passed, the relief would apply to Osage County residents 62 or older who own a homestead (or have a legal or equitable written interest in a homestead) that is their primary residence, are liable for the property taxes on that homestead, and do not owe any delinquent taxes, interest, or penalties to the county.

Labeling the tax relief as a credit is not accurate. SB 190 offers a partial tax freeze, not a reduction. Per the bill, the eligible taxpayer could be credited the difference between their tax liability for the first year they became eligible and their current tax statement, but only for the homestead portion of their primary residence.

For example, if the eligible taxpayer lives in a home on a quarter-acre lot, that freeze would apply to the entire residential property. For those with more significant acreage, it would only apply to one home and the property immediately surrounding the house. Exactly how much acreage is not specified and is left to counties to determine.

SB 190 does not apply to personal property. As such, mobile homes would not be eligible, though the property on which they sit may be.

Additionally, some taxes, such as bond indebtedness levies, are exempt from the tax relief program. Taxes may also still increase due to property improvements that increase valuation or if the property is annexed into a new taxing jurisdiction.

Because the bill specifies that the recipient must not owe delinquent taxes, fees, or penalties to the county, late payment of taxes, including personal property tax, could render some recipients ineligible, in which case they would be liable for the total amount and have to reapply the following year to establish a new baseline for the relief.

Although Gov. Mike Parson signed the bill on July 6, 2023, and it became effective on Aug. 28, 2023, very little guidance was offered on how to administer it.

Applicants would have to apply for the tax relief annually, and processing those applications would require additional county personnel to verify the applicant was the legal owner of the property, process the applications, determine the amount of the relief, and ensure the applicant did not owe any delinquent taxes, fees, or penalties to the county. The measure would also require additional reporting to other taxing entities within the county.

That means the expense of administering the tax relief is also significant. Discussions among Osage County elected officials indicate that four additional staff members would be required to administer the program at an estimated cost of approximately $200,000 per year. Additionally, software would have to be created or modified to allow tracking and reporting. The additional expense would require the county to either raise taxes or cut current services to pay for it. In addition, school districts, fire departments, and other taxing entities would have to either cut their budgets or raise their tax rates to compensate for lost revenue.

As Fatima Superintendent Chuck Woody said at the board’s May school board meeting, “If that goes in, and there’s another cut of money, as a board, we’re gonna sit here in three or four years, (and) you know what we’re gonna have to do? Go to everybody and say, ‘Hey, we gave you all these tax cuts through everything, but we’re gonna raise your taxes to get revenue back.’ And we’re all gonna look like devils.”

Osage County Collector Denise Nolte is busy preparing tax bills but has agreed to offer several anonymous bills soon for a more detailed analysis of how this tax relief would affect Osage County residents compared to how much it would cost to administer.