Senator David Sater’s Legislative Column for the Week of Feb. 1: Missouri Legislature Rejects Tax Increase on Farmers

Every two years, the Missouri State Tax Commission releases a study reassessing agricultural land, based on average productivity and costs. This year, the commission proposed to increase taxes on soil grades 1-4, meaning many Missouri farmers would see a property tax increase of 5 percent, unless rejected by a vote of the Missouri Legislature. This proposed increase comes on the heels of a 5 percent hike by the Tax Commission just two years ago, which many of us in the Legislature opposed but were unable to block.

A 5 percent increase may not seem like a lot, but when you consider the fact that our area has seen devastating floods and drastic drops in many commodity prices, including the price of beef, a 5 percent tax increase would really affect a farmer’s bottom line. This comes at a time when it is harder and harder for young people to buy a farm or get involved in agriculture. The average age of a Missouri farmer is 58 and it’s climbing. At the same time, the average size of a Missouri farm is around 290 acres. Taken together, this makes it a tough time to be in agriculture and dropping a 5 percent tax increase on farmers will just make the situation worse.

So, one of the first bills we passed this year was one rejecting this tax increase from the State Tax Commission. It was overwhelmingly approved in both the Senate and the House and I was proud to support it. Agriculture is the economic engine of our state and at a time when many of our farmers are struggling with depressed commodity prices and natural disasters, we need to get government out of their way and make it easier for them to do what they do best: feed our country and produce our country’s chief export.

In other news, a bill I filed to make changes to our state’s prevailing wage laws was heard this week in the Small Business, Insurance and Industry Committee. Prevailing wage is the rate that must be paid to workers on public works construction projects in Missouri, such as bridges, roads and government buildings. The prevailing wage rate differs by county and for different types of work. While it sounds harmless, the state’s current prevailing wage law is actually making it difficult and nearly impossible for many of our small communities to fix or maintain their public buildings and roads.

Prevailing wage is preventing these needed improvements because it forces cities and counties to pay wages far beyond the local going rate. For example, one town in our area needed to repave an eight square-foot section of a street intersection. Under prevailing wage, it costs $17,366. If it were private property, that same project would have cost $1,840. To give you another example, to replace a roof of an ambulance barn is more than $63,000 under prevailing wage, but only $22,000 on private property. When prevailing wage costs three, four and even eight times the private sector rate, something is wrong with the system.

These are taxpayer-funded projects and, therefore, taxpayer-funded wages. You can understand the frustration of folks or small business owners in southwest Missouri when they walk around and see an out-of-town contractor working on a project and think, “why can’t we do that project locally?” or “why are my elected leaders using MY tax dollars to pay someone from Kansas City or St. Louis when we can do the same project at a better price?”

I was thinking the same thing and I filed Senate Bill 606 to fix it. My bill revises the definition of “construction” to remove maintenance work, which means projects that make improvements, alterations or major repairs to public works would be exempt from prevailing wage. The only caveat is that maintenance work could only improve the utility or enhance the appearance of an existing facility provided that the size, type or extent is not changed. This is a reasonable revision of our prevailing wage law that will keep our tax dollars local while also maximizing the number of projects we can do. This benefits taxpayers, our communities and our local small businesses. That’s a combination I can get on board with and I look forward to pushing this bill as the legislative session moves on.

As always, I welcome your ideas, questions and concerns about Missouri government. You may contact me at the State Capitol as follows: (573) 751-1480, or by writing to Sen. David Sater, Missouri State Capitol, Room 419, Jefferson City, MO 65101.