|Date Requested:January 24, 2008
Time Requested:05:16 PM
| FUND(S) |
General Revenue Fund, local governments
Sources of Revenue
|General Fund,Other Fund local property tax|
Legislation creates:Neither Program nor Fund
Effect this measure will have on costs and revenues of state government.
| The stated purpose of this resolution is to increase the homestead exemption from $20,000 to $50,000.
The increase in the Homestead Exemption from $20,000 to $50,000 would result in a revenue loss of $33.1 million annually for local levying bodies and an increase of $3.2 million in General Revenue Fund collections.
The State Tax Department will incur a one-time programming cost of $40,000. There would be no other additional administrative costs to the State Tax Department or local governments.
|Effect of Proposal||Fiscal Year|
|1. Estmated Total Cost||0||40,000||0|
|Repairs and Alterations||0||0||0|
|2. Estimated Total Revenues||0||0||-29,900,000|
3. Explanation of above estimates (including long-range effect):
The increase in the Homestead Exemption would result in a loss of $33.0 million in local property tax revenue. General Revenue Fund collections would increase by $3.2 million as the $130,000 decline in State property tax revenue would be offset by a gain in Personal Income Tax collections. As the level of the Homestead Exemption rises, the number of taxpayers who owe property taxes on their home declines. Therefore, the cost of the refundable property tax credit against Personal Income Tax liability for lower income households would also decline.
The cost reflected on the chart above is a one-time programming cost to the State Tax Department for computer programming changes on the statewide property tax computer network. There would be no other additional administrative costs to the State Tax Department or local governments.