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 stated purpose of this bill is to limit the amount that property can increase in value at a reassessment to fifteen percent of the previously assessed amount, provided that the increase in assessment is not due to improvements made to the property.
Passage of this bill would result in an unknown loss in potential property tax revenue for local governments and the State beginning in the 2013 fiscal year. The loss cannot be readily determined because the State Tax Department has no data to determine the amount of the increase which is attributable to unimproved property. 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. Other additional administrative costs to the State Tax Department or local governments cannot be determined.
Fiscal Note Detail
| 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 |
0 |
Explanation of above estimates (including long-range effect):
Passage of this bill would result in an unknown loss in potential property tax revenue for local governments and the State beginning in the 2013 fiscal year. The loss cannot be readily determined because the State Tax Department has no data to determine the amount of the increase which is attributable to unimproved property. 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. Other additional administrative costs to the State Tax Department or local governments cannot be determined.
Memorandum
The stated purpose of this bill is to limit the amount that property can increase in value at a reassessment to fifteen percent of the previously assessed amount, provided that the increase in assessment is not due to improvements made to the property.
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 15 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.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov