February Public Affairs Committee Report
By Heath Clarkston
Half-Cent Sales Tax for Capital Improvements Extension – Voters Decide
Since 2007, voters in Cole County and Jefferson City have supported a local sales tax to improve and expand our local infrastructure and this key tax will be on the ballot in 2026 for a 10-year renewal. As this tax is levied in both the county and city, it will need to pass two separate ballots. Cole County voters will be voting on the extension at the April election, and City voters will be voting at the August election. The HBA has been an ardent supporter of this needed tax for roads, bridges, and critical infrastructure since the beginning and are hopeful the latest reauthorization will be successful. At the February General Membership meeting, we are set to hear an update from the proponents of the tax and gain more perspective on why this extension is so important to our community. The City Council this month voted to place the ½ sales tax extension on their August ballot.
House Committee Considers Bill to Preempt Green Energy Codes beyond 2009
On January 21st, the House Commerce Committee held a public hearing on House Bill 2384 sponsored by Rep. Mike Jones (R-Kansas City). HB 2384 was proposed on behalf of the Home Builders Association of Greater Kansas City as they have been struggling in their negotiations with municipalities in their area on the adoption of local energy codes that do not contain needed amendments to ensure that housing remains affordable and multiple construction standards remain available for new construction.
Per the HBA of Kansas City, a recent ordinance by the City of Kansas City to adopt the 2021 IECC unamended has led to many builders no longer seeking permits inside city limits and many homebuyers looking for building sites outside the city limits due to these financial barriers to entry. Further, the HBA of Kansas City worries that other area municipalities will begin adopting the unamended energy codes and thus cause expanded damage to the home building industry in the Kansas City area. The bill as introduced would preempt local governments from adopting or continuing to enforce “standards or features exceeding standards or features defined in the 2009 International Residential Code (IRC); or standards established in the 2009 international Energy Conservation Code (IECC). Testimony was received by the HBAs of Kansas City and St. Louis in support. Several groups testified in opposition including the City of Kansas City, American Institute of Architects, and various groups that promote energy efficiency. Similar legislation was passed in the Missouri House in 2025, but the bill ran into difficulty on the Senate floor due to opposition from the Senators representing the City of Kansas City.
Tax Policy to Dominate 2026 Missouri Legislative Session
For 2026, we fully expect the focus of debate to be centered on tax policy at all levels this legislative session. Governor Kehoe announced at his State of the State address on January 13th, his plan to phase out the state income tax. The Governor’s plan will require the legislature to place a question on the ballot for November to modify the Missouri Constitution to allow for the imposition of a statewide sales tax on services that is currently prohibited. Any effort to reduce the state income tax will need a corresponding tax offset to replace the lost state general revenue used to fund government services and programs such as public education and healthcare.
The most discussed offset discussed is the imposition of an increased statewide sales tax on goods and services. This offset is anticipated to require the replacement of $6.5-$7 billion in state funds. If successful this fall with a state constitutional amendment, the Missouri General Assembly would tackle the issue of income tax repeal and replacement in the 2027 legislative session.
Also, this year, the Legislature is expected to tackle the issue of county property taxation, which includes local assessment procedures and tax rates. The House held interim committee hearings on this topic over the interim and will have a report on recommendations forthcoming. Many expect the Senate to focus on the process and powers of the Missouri State Tax Commission and potentially make statutory changes to its laws governing equalization of taxes.