Date Requested:March 19, 2009
Time Requested:10:52 AM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2009R2931 Introduced HJR23
CBD Subject: HOMESTEAD EXEMPTION 50% OF AVERAGE
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 Resolution is to change the homestead exemption for citizens of this state and who are sixty-five years of age or older or are permanently and totally disabled, from exempting the first $20,000 of assessed valuation of any real property to exempting an amount equal to the first fifty percent of the average sale of real property in that county over the five years preceding the assessment.
    
    The change in the Homestead Exemption would result in a loss of $43.3 million in local property tax revenue and an increase in General Revenue Fund collections of $3.5 million.
    
    Additional administrative costs for the State Tax Department for computer programming changes on the statewide property tax computer network cannot be determined. There would be no additional administrative costs for local governments.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2009
Increase/Decrease
(use"-")
2010
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 -39,900,000
3. Explanation of above estimates (including long-range effect):
    The change in the Homestead Exemption would result in a loss of $43.3 million in local property tax revenue. General Revenue Fund collections would increase by $3.5 million as the 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.
    
    Additional administrative costs for the State Tax Department for computer programming changes on the statewide property tax computer network cannot be determined. There would be no additional administrative costs for local governments.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us
    The stated purpose of this Resolution is to change the homestead exemption for citizens of this state and who are sixty-five years of age or older or are permanently and totally disabled, from exempting the first $20,000 of assessed valuation of any real property to exempting an amount equal to the first fifty percent of the average sale of real property in that county over the five years preceding the assessment.
    
    There are some concerns in a percentage exemption based on sales in that county alone in that the exemption amount would be larger in some counties than it would be in others. While this proposal would change the Constitution to allow for this, it does not change the provision of the Constitution that calls for fair and equal taxation. Therefore, there would be conflicting constitutional provisions.