Date Requested:January 11, 2012
Time Requested:04:19 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2012R1308 Introduced SJR6
CBD Subject: HOMESTEAD EXEMPTION CALCULATION AMENDMENT
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 provide an alternative method of calculating the homestead exemption based on the average cost or value of the residential property by county. The exemption shall never be less than $20,000.
    
    This bill proposes an amendment to the West Virginia Constitution increasing the exemption available for homesteads from the current $20,000 to not less than $20,000 and gives the Legislature the authority to provide tax relief by calculating a percentage of the average cost or value by county of any real property or personal property in the form of a mobile home used exclusively for residential purposes with the homestead exemption never less than $20,000. The impact of this proposal on State and local property tax revenue cannot be determined because the proposal does not specify an exact amount for the value of the homestead exemption. Any significant increase in the Homestead Exemption would cause a significant decrease in local revenue, particularly for schools and counties.
    
    Additional administrative costs for the State Tax Department would be $20,000. There would be no additional administrative costs for local governments.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2012
Increase/Decrease
(use"-")
2013
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 0
3. Explanation of above estimates (including long-range effect):
    This bill proposes an amendment to the West Virginia Constitution increasing the exemption available for homesteads from the current $20,000 to not less than $20,000 and gives the Legislature the authority to provide tax relief by calculating a percentage of the average cost or value by county of any real property or personal property in the form of a mobile home used exclusively for residential purposes with the homestead exemption never less than $20,000. The impact of this proposal on State and local property tax revenue cannot be determined because the proposal does not specify an exact amount for the value of the homestead exemption. However, some counties possess the capacity to raise tax rates to offset reductions in the tax base. In response to a recent decline in tax base, sixteen county commissions raised their property tax rates in FY2012. County tax rate increases were as high as 9.3 percent in Berkeley County and 9.9 percent in Jefferson County. Absent any tax rate increases, any significant increase in the Homestead Exemption would cause a significant decrease in local revenue, particularly for schools and counties..
    
    Additional administrative costs for the State Tax Department would be $20,000. There would be no additional administrative costs for local governments.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this resolution is to provide an alternative method of calculating the homestead exemption based on the average cost or value of the residential property by county. The exemption shall never be less than $20,000.
    
    The proposed amendment raises concerns of equalization of property assessment throughout the State since the proposal would permit county by county deviation from such equalization which may violate Article X, Section 1 of the West Virginia Constitution.