Columbia
What Are Disadvantages to Achieving Home Rule Status?

Opponents to home rule cite many of the advantages as disadvantages.  Typically, home rule municipalities have broad taxing and regulation authority, including the ability to increase property taxes without a referendum, to issue an unlimited amount of debt, to create new taxes and fees, and to regulate property.

The ability to increase property taxes without a referendum.  The City of Columbia already has this authority.  While many non-home rule municipalities are subject to the Property Tax Extension Limitation Law (PTELL) which limits the ability to increase property taxes beyond 5% or the increase in the consumer price index (whichever is less), the City of Columbia is not subject to this as it is situated in multiple counties.   Even with this ability, the City’s property tax rate has decreased 5 of the previous 6 years.

To issue an unlimited amount of debt.  The City is subject to a “debt cap” of 8.625% of the value of the taxable property within the City.  Based Tax Year 2021, this amount is $28,947,708.  This statutory cap does not apply to those instruments (or bonds) issued with an alternate revenue source pledged for repayment (other than property taxes).  The City’s Series 2015, and Series 2020 Bonds (the only active bonds issued by the City) both fall into the latter category, and are not counted toward the City’s debt limit.

Furthermore, while home rule communities are not subject to the debt cap, and may exceed 20-year limit on indebtedness instruments, home rule municipalities must maintain appropriate debt limits in order to preserve bond ratings, and retain an economic position favorable to prospective bond buyers.

To create new taxes and fees.  The City currently must seek voter approval to impose a non-home rule sales tax (in 0.25% increments, up to 1%).   However, the City is able to impose any fee directly related to offsetting costs of administering various programs and/or licenses. 

To regulate property.  Non-home rule municipalities are currently able to implement inspection programs triggered by change of occupancy, and other situations.  Columbia has already implemented such processes, and has the current authority to adopt any building/property maintenance codes felt appropriate.

Other questions concerning home rule vs. non-home rule pertain to the intended “tax base” of home rule tax – specifically food and beverage taxes.   While a claim that “Columbia residents may save on property taxes, but will pay at restaurants instead” is somewhat accurate (residents of Columbia are subject to taxes imposed on restaurant/bar patrons, same as non-residents), from December 2021 through November 2022, only 19.17% of visitors to all Columbia restaurants were residents of Columbia.  For all commercial properties in Columbia, 66.23% of visitors reside outside of Columbia.

Show All Answers

1. What is Home Rule?
2. Why Home Rule?
3. How Can Columbia Become a Home Rule Municipality?
4. How Will Home Rule Help Columbia?
5. What Other Municipalities are Home Rule?
6. How Have Other Municipalities Used Home Rule?
7. What Are Disadvantages to Achieving Home Rule Status?
8. How Do Residents Oversee Use of Home Rule?