FISCAL NOTE
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 purpose of this resolution is to amend the Constitution to increase the homestead exemption from $20,000 to $50,000 or 30% of assessed valuation, whichever amount is greater.
The increase in the Homestead Exemption from $20,000 to $50,000 or 30% of the assessed value would result in a revenue loss of $37.8 million annually for local levying bodies and an increase of at least $3.0 million in General Revenue Fund collections.
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
| Effect of Proposal |
Fiscal Year |
2010
Increase/Decrease
(use"-") |
2011
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 |
-34,800,000 |
Explanation of above estimates (including long-range effect):
An increase in the Homestead Exemption to $50,000 or 30 percent of the assessed value would result in a loss of $37.8 million in local property tax revenue. General Revenue Fund collections would increase by at least $3.0 million as the $150,000 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.
The 30 percent of assessed value provision would effectively apply only to homes appraised above $277,777. In the current year, slightly more than 1% of Homestead Exemption homes are valued above $277,777. Forty-six counties have qualified homes in this category.
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: kerri.r.petry@wv.gov