Testimony in Support of SB 822 – The Circuit Breaker Tax Credit

Date: February 12th, 2024
To: Chairman Hoskins and Members, Senate Economic Development and Tax Policy
From: Mallory Rusch, Executive Director, Empower Missouri
Re: Our support for SB 822

Empower Missouri has spent more than 120 years fighting poverty in Missouri. Today, we come to present testimony on a bill which specifically targets our neighbors with the lowest incomes. On behalf of our staff, board, and coalition members we are asking you to support Senate Bill 822. 

The Senior Citizen Property Tax Relief Credit, commonly called the Circuit Breaker Tax Credit, helps support low income seniors and people with disabilities to stay stably housed. It is easy to imagine a common scenario in neighborhoods across Missouri where low income seniors may own their home outright or may be paying a predictable mortgage or rent per month which fits into their budget. In economic uncertainties after 2020, many of those seniors are likely receiving higher property tax bills than before. These seniors are not able to easily add a new job to pay for the increased living costs, and they could find themselves unable to pay an increased property tax bill. Sometimes this results in the home being seized by the county and sold in a tax sale, displacing the homeowner.

Housing cost is often the largest monthly cost a household pays. This property tax relief credit helps to return all or some portion of the property taxes paid by low income seniors and people with disabilities back into their bank accounts, lightening their burden and helping them to afford other basic human needs such as medicine and food.

Currently, the Senior Citizen Property Tax Relief Credit is capped at $750 for renters and $1,100 for homeowners. While $750 will make an impact on seniors’ budgets, it does not make the impact in 2024 that it made in 2008, when that amount was last adjusted. Eggs were $1.98 in 2008, and over $5.00 a dozen today. The change in SB 822 would allow that credit to grow with inflation, as well as adjust the income eligibility for 2024 and the future. It is extremely important for lawmakers to understand that laws they pass this year will continue to impact families in 50 years, and automatically building in adjustments for inflation helps to ensure the impact of the policy in the long term. We support adding an inflation adjustment to the Circuit Breaker Tax Credit and all programs geared towards households with the lowest incomes.

Likewise, SB 822 also raises the income limit for eligibility in this program. Likewise, this hasn’t been updated since 2008, and the value of the dollar is not the same. The Federal Poverty Limit for a single person household was $10,400 in 2008. In 2024, it was raised to $15,060, a 45 percent increase over the last sixteen years. It is critical that we raise and index the eligibility limit to keep pace with inflation over time.