Date Requested:January 14, 2012
Time Requested:01:08 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1314 Carry Over HJR9
CBD Subject: HOMESTEAD EXEMPTION 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 resolution is to increase the homestead exemption from $20,000 to $30,000 by 2011.
    
    The stated purpose of this bill is to increase the Homestead Exemption by 2011. However, the bill, as written, would increase the Homestead Exemption from $20,000 to $25,000 beginning July 1, 2013, and would increase the Homestead Exemption from $25,000 to $30,000 beginning July 1, 2014. The increase to $25,000 in the initial year would result in a revenue loss of $9.5 million for local levying bodies and an increase of $40,000 in General Revenue Fund collections. The increase in the Homestead Exemption from $20,000 to $30,000 would initially result in a revenue loss of $17.7 million annually for local levying bodies and an increase of $430,000 in General Revenue Fund collections. The number of senior citizens is expected to grow by nearly 37 percent over the next decade. Homestead Exemption costs will rise in similar fashion over the next decade.
    
    There would be a one-time cost of $20,000 to the State Tax Department for programming changes and changing and printing the Homestead Exemption forms. There would be no additional costs to 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 -17,300,000
3. Explanation of above estimates (including long-range effect):
    The stated purpose of this bill is to increase the Homestead Exemption by 2011. However, the bill, as written, would increase the Homestead Exemption from $20,000 to $25,000 beginning July 1, 2013, and would increase the Homestead Exemption from $25,000 to $30,000 beginning July 1, 2014. The increase to $25,000 in the initial year would result in a revenue loss of $9.5 million for local levying bodies and an increase of $40,000 in General Revenue Fund collections. The increase in the Homestead Exemption from $20,000 to $30,000 would initially result in a revenue loss of $17.7 million annually for local levying bodies and an increase of $430,000 in General Revenue Fund collections. The number of senior citizens is expected to grow by nearly 37 percent over the next decade. Homestead Exemption costs will rise in similar fashion over the next decade.
    
    These estimates are based upon the assumption of no tax rate changes on the part of county commissions, municipalities and voters. Twenty-one county commissions, numerous municipalities (e.g. Charleston), and 34 school boards (excess levies) currently impose tax rates below their allowed constitutional caps. Some of these authorities may raise tax rates to partially offset any local revenue loss.
    
    There would be a one-time cost of $20,000 to the State Tax Department for programming changes and changing and printing the Homestead Exemption forms. There would be no additional costs to local governments.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this resolution is to increase the homestead exemption from $20,000 to $30,000 by 2011.
    
    The note at the end of the resolution incorrectly states that the purpose of the resolution is to increase the Homestead Exemption by 2011. The resolution, if passed, would put a constitutional amendment before the voters in 2012 to increase the Homestead Exemption.