FISCAL NOTE
Date Requested: February 20, 2025
Time Requested: 04:18 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1189 |
Introduced |
|
HJR22 |
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund, Local Governments
Sources of Revenue:
Other Fund General Fund and Local Property Tax Revenue
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
The stated purpose of this bill is to change the language relating to the amount of the Homestead Exemption from "the first $20,000" to " the first $50,000" of property eligible for the Homestead Exemption.
Under the provisions of this bill, the value of the Homestead Exemption would be increased from $20,000 to $50,000. This increase in the Homestead Exemption would initially result in a revenue loss of $61.0 million annually. The estimated revenue loss would be roughly $17.5 million to the State General Revenue Fund, $24.1 million to local county school boards, $16.0 million to county commissions and $3.4 million to municipalities. The distribution of estimated cost is based on information from taxes levied as reported in the Classified Assessed Valuations Taxes Levied for 2024 Tax Year publication of the State Tax Department and the incorporation of the calculation of local property tax share within the State Aid to Schools Formula.
Additional one-time administrative costs for the State Tax Department would be $50,000. Other additional costs to the State or local governments would be minimal.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2025
Increase/Decrease
(use"-") |
2026
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 |
-61,000,000 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
Under the provisions of this bill, the value of the Homestead Exemption would be increased from $20,000 to $50,000. This increase in the Homestead Exemption would initially result in a revenue loss of $61.0 million annually. The estimated revenue loss would be roughly $17.5 million to the State General Revenue Fund, $24.1 million to local county school boards, $16.0 million to county commissions and $3.4 million to municipalities. The distribution of estimated cost is based on information from taxes levied as reported in the Classified Assessed Valuations Taxes Levied for 2024 Tax Year publication of the State Tax Department and the incorporation of the calculation of local property tax share within the State Aid to Schools Formula.
In most counties, decreased tax revenue due to an increase in the Homestead Exemption would likely be at least partially offset by higher tax rates and tax burdens on other types of property, including both real property taxes and personal property taxes on vehicles, business inventory, machinery and equipment.
Additional one-time administrative costs for the State Tax Department would be $50,000. Other additional costs to the State or local governments would be minimal.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
Person submitting Fiscal Note: Mark Muchow
Email Address: radfiscal@wv.gov