Date Requested:January 31, 2011
Time Requested:05:07 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R2241 Introduced HB2944
CBD Subject: CAPPING A PROPERTY TAX INCREASE
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 to capping a property tax increase resulting from an increase from the three-year reappraisal at five percent of the previous years property tax assessment.
    
    Assuming no changes in tax rates, passage of this bill would result in the loss in potential property tax revenue of approximately $82.9 million for local governments and $330,000 for the State in the 2013 fiscal year. This loss would decrease slightly each year, but the decrease would be offset by the fiscal effect of the limitation on assessment increases in future years. Local governments could recoup a portion of the revenue loss by raising property tax rates.
    
    As a result of passage of this bill, programming changes would be needed to track property on a property-by-property basis. The State Tax Department would incur additional costs of $40,000 to make these changes. Additional costs to local governments cannot be determined.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
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 -83,300,000
3. 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 approximately $82.9 million for local governments and $330,000 for the State in the 2013 fiscal year. This loss would decrease slightly each year, but the decrease would be offset by the fiscal effect of the limitation on assessment increases in future years. Local governments could recoup a portion of the revenue loss by raising property tax rates.
    
    As a result of passage of this bill, programming changes would be needed to track property on a property-by-property basis. The State Tax Department would incur additional costs of $40,000 to make these changes. Additional costs to local governments cannot be determined.
    
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to capping a property tax increase resulting from an increase from the three-year reappraisal at five percent of the previous years property tax assessment.
    
    The bill limits annual increases in assessed value of real property to ten percent. Article X, Section 1 of the West Virginia Constitution provides that “all property, both real and personal, shall be taxed in proportion to its value to be ascertained as directed by law”. By limiting such increases in value to a maximum of 5 percent per year, the bill allows some property to be taxed in a way that is not proportionate to its value, which may possibly violate the constitutional provision.