While economics have wavered over the past couple of years, a new report says steady property tax rates have created a consistent source of revenue for state governments -- including Missouri.
The Show-Me State, however, has been in the middle third in terms of how big an effect those collections have on overall general revenue.
The report, compiled by home-improvement software provider Porch, ranked the Show-Me State at No. 33 in terms of its property tax collection based on 2019 data from the U.S. Census Bureau. Property taxes made up around $6.8 billion of the state's $51 billion total general tax revenue collection, according to the report, 13.5 percent of the total amount. Annual property tax revenue per person was projected at $1,118.
The U.S. as a whole made 16.6 percent of its total collections through property taxes, per the report. With $557 billion in personal property collections nationwide, the report puts collections at $1,758 per person. Property taxes were the second most prominent source of revenue on the national level after intergovernmental revenue.
Alabama, meanwhile, was ranked No. 50 with just under 7 percent of its total general revenue share made up of property tax collections. It also made up its $3 billion annual property tax revenue with $620 in collections per person, the lowest per capita collection rate by far.
These rates are a far cry from the highest on the report: New Hampshire's total general tax revenue was 36.5 percent personal property collections, amounting to $4.4 billion and $3,246 per person. According to the report's authors, these collections reflect a vastly different taxing structure to Missouri's and a heightened reliance on property taxes.
"Each state and local government offers a unique collection of revenue sources that weights income, sales, property, and other taxes differently," the report read. "New Hampshire stands out in part because the state has neither an income nor a sales tax, so many services are funded at the local level through property taxes."
According to the report, nine states have no state income tax, five have no state sales tax and others have varying caps and tax rates from one location to the next.
While Missouri relies on income and sales taxes to fill out much of its general revenue coffers, Gov. Mike Parson recently announced he was in talks to call lawmakers back to Jefferson City to ease individual income tax rates from 5.4 percent to 4.7 percent amid a record state funding surplus. He also proposed eliminating income tax for those making $16,000 or less a year and couples making less than $32,000 annually, changes that would likely alter the makeup of the state's general revenue collections as well.
The report also noted, while economic statistics have varied wildly over the past two years amid a pandemic and numerous financial stumbling blocks, taxes have remained a strong driver of state and local government budgets.
"Behind falling unemployment, rising wages, and strong consumer spending, income and sales taxes have produced stronger-than-expected revenues since the initial shock of the pandemic," it reads. "Property taxes tend to be more stable over time because property values are less susceptible to economic volatility than income and sales tax."
While that stability has kept budgets afloat, the authors speculate an uptick in residential real estate values could yield further strength for the revenue source.