James R. LaytonDuring a brief special legislative session in June, the Missouri General Assembly enacted SB3. The public focus was on provisions addressing financial assistance for stadiums for the Kansas City Chiefs and the Kansas City Royals. But SB3 also included a new law, §137.1055, that would require most – but not all – Missouri counties to hold a vote on whether to limit property tax increases for some of their residents. In some of the affected counties, property tax increases for the affected residents would be limited to 5% in a year. In other counties, there would be a perpetual tax freeze for some residents. A residents in a third group of counties are excluded entirely.
Section 137.1055 would have a significant adverse impact on taxing districts in affected counties that rely on property tax. Those include school, fire protection, ambulance, library, community college, road, and other districts. It would treat taxpayer inequitably – not just by treating taxpayers in some counties differently than those in other counties, but by effectively giving a tax break to some taxpayers in cross-county districts that taxpayers in other counties in the same district cannot get.
On Friday, September 26, 2025, a suit was filed challenging the validity of the residential tax limit provision of §137.1055. Jim Layton of Tueth Keeney is lead counsel. The named plaintiffs are two taxpayers, six school districts, and a fire protection district, though the suit is receiving financial support from a much larger group of districts that are concerned about the inequities and adverse financial impacts of §137.1055. The suit alleges that §137.1055 violates the Missouri Constitution by differentiating among taxpayers and counties, and by creating a tax credit without making up for the districts’ loss of funds, as the Missouri Constitution requires.
Because §137.1055 requires that the tax limitation be placed on the ballot by April 2025, the plaintiffs will seek expedited resolution of the case.
Sign up to receive Insight notifications via email here.
James Layton leads the firm’s Appellate practice group and is a member of the firm’s Commercial Litigation, Labor, and Education groups. He assists clients with analysis and presentation of complex legal issues in Missouri and federal courts, both trial and appellate. In addition to handling cases himself and with other attorneys at Tueth Keeney, Jim consults with clients on appellate strategy and assists other counsel in high-stakes, complex appeals.
Jim has briefed and argued cases before the U.S. Supreme Court and before all Missouri appellate courts-including nearly 100 cases before the Missouri Supreme Court. He has represented clients in U.S. district courts and in Missouri circuit courts from Jackson County to the City of St. Louis. He has extensive experience with government-related litigation and state taxation disputes. Jim is a fellow of the American Academy of Appellate Lawyers, a past president of the Bar Association of the U.S. Court of Appeals for the Eighth Circuit, and a past chair of the American Bar Association’s Council of Appellate Lawyers. He is a frequent speaker in the areas of appellate practice and constitutional law, both state and federal.
The law firm of Tueth Keeney Cooper Mohan & Jackstadt, P.C. (the “Firm”), has one of the largest and most successful education law groups in the country. The Firm regularly serves the legal counsel needs of approximately 150 school districts throughout Missouri. The Firm also has one of the largest school law practices in Central and Southern Illinois.