FISCAL NOTE
FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund,Other Fund local property tax
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is establish a three year moratorium on tax increases on Class II, III and IV real property.
Assuming no changes in tax rates, passage of this bill would result in the loss in potential property tax revenue of up to $53.6 million for local governments and $220,000 for the State in the 2010 fiscal year. The three-year moratorium impact on State and local revenues would be a potential loss of up to $161.4 million. The proposed moratorium would not apply to new transfers of real property, real property with no previous value and real property upon which new construction has occurred. The Tax Department is unable to quantify this effect, but these stipulations would reduce the revenue impact.
As a result of passage of this bill, programming changes would be needed to track property on a real property-by-real property basis. The State Tax Department would incur additional costs of $150,000 to make these changes. Other additional costs to the Tax Department or local governments would be minimal.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2008
Increase/Decrease
(use"-") |
2009
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
150,000 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
150,000 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
-16,140,000 |
Explanation of above estimates (including long-range effect):
Assuming no changes in tax rates, passage of this bill would result in the loss in potential property tax revenue of up to $53.6 million for local governments and $220,000 for the State in the 2010 fiscal year. The three-year moratorium impact on State and local revenues would be a potential loss of up to $161.4 million. The proposed moratorium would not apply to new transfers of real property, real property with no previous value and real property upon which new construction has occurred. The Tax Department is unable to quantify this effect, but these stipulations would reduce the revenue impact.
As a result of passage of this bill, programming changes would be needed to track property on a real property-by-real property basis. The State Tax Department would incur additional costs of $150,000 to make these changes. Other additional costs to the Tax Department or local governments would be minimal.
Memorandum
The stated purpose of this bill is establish a three year moratorium on tax increases on Class II, III and IV real property.
The provisions of the proposed bill may violate Article X, section 1 of the West Virginia Constitution which requires that “all property . . . shall be taxed in proportion to its value” and requires that “taxation shall be equal and uniform throughout the State.”. The proposed moratorium would exclude “public utilities, new transfers or property upon which no prior value was established or properties upon which new construction occurred during the previous year.”
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us