Given the current COVID-19 pandemic, the various stay-at-home and social distancing orders, and the resulting negative economic impact, it is unknown at this time exactly what will be accomplished during the remaining legislative session. It is believed that the first priorities will be legislation to address the effects of COVID-19 and passing the budget. Even if legislation to deal with COVID-19 remains the focus, it is also unclear what the Missouri legislature would include in that umbrella and it may very well include harmful legislation that deals with the use tax and other taxes, as well as possibly legislation dealing with video service and telecommunication providers. Therefore, while we hope that the below bills will not be brought back up during the remainder of this session, in the event they are, we wanted to inform you about these bills threatening city revenues.
SB 526 This bill would amend the 2007 Video Services Providers Act (§§ 67.2675 to 67.2714), and poses a significant threat to municipal revenue across the state. The bill would reduce City Cable Franchise Fees to only $2/subscriber (although it is unclear if this is a one-time, monthly, quarterly, or annual limitation). One estimate from the Municipal League of Metro St. Louis places these revenue cuts to be anywhere from 75% up to 92%. The bill also proposes to modify the definition of “gross revenue” for video service provider fee payments, which could result in substantial drops in payments from video service providers statewide. The bill also apparently attempts to undo the very recent holding of the Missouri Supreme Court in City of Aurora v. Spectra Communications Group, LLC, by changing provisions in Chapter 67 RSMo. to state that no City shall be permitted to require a telecommunications company “to obtain a written agreement, other than a permit, for use of the public right-of-way,” and by dramatically limiting the ability of “grandfathered” political subdivisions to collect linear foot fees from right-of-way users. There is a similar (if not more restrictive) bill also pending in the House – HB 2019. We urge cities to contact their Legislators and oppose these bills if they are concerned about the potential loss of revenue and right-of-way authority proposed by this bill. We believe this bill is still being pursued, and that harmful language from this bill may also be inserted into HB 1859 or SB 632, which relate to the Broadband Grant Program.
SJR 52/ SJR 46 - SJR 52 calls for a Constitutional Amendment that would place additional limitations on a City’s ability to impose or increase a tax or fee, beyond that which the Hancock Amendment (Art. X, Sec. 22) already imposes. Currently, the Hancock Amendment requires that before a City can impose a new tax or increase an existing tax, the tax must be approved by “the required majority of the qualified voters of that county or other political subdivision voting thereon.” Thus, out of all of the qualified voters who vote in that election, the tax must receive majority approval. SJR 52 seeks to amend the Missouri Constitution and add an additional requirement that any new tax, or an increase in a current tax, must be approved by a qualified majority of the voters and at least 50% of qualified voters must cast a ballot in the election. If a municipality frequently encounters low voter-turnout, this would make it even more difficult to increase or pass new taxes. A related proposal, SJR 46, contains similar language but requires at least 22% of qualified voters to cast a ballot in the election.
SB 1084 – This bill could result in drastic drops to municipal license tax revenue from telecommunications companies. It would enact new provisions limiting the scope of all cities’ license taxes on telecommunications companies by providing that the tax base includes only “gross receipts resulting from the retail sale of basic local telecommunications service and derived from the furnishing of such service entirely within the municipality.” It would also further limit the collection of penalties and interest on certain telecommunications taxes and fees. Finally, it would impose a three-year statute of limitations on any fees or costs due pursuant to §§ 67.1830 to 67.1846 (which would presumably include linear foot fee collection). We urge cities to contact their Senators and oppose this bill if they are concerned about the potential loss of revenue proposed by this bill.