FISCAL NOTE
Date Requested: February 15, 2022
Time Requested: 05:33 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2603 |
Introduced |
HB4725 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund local property tax
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to provide definitions for “market value” and “true and actual value”; and that property taxes may not be appraised and assessed higher than the value in 2019.
The bill, as written, provides that the assessed value of property is not greater than the assessed value in 2019. In addition, the bill defines market value and true and actual value as the value of all such property in 2019. The provisions of this bill are silent with regard to the valuation of new property or property additions subsequent to 2019.
Under the assumption of static tax rates during the first year of effect, there would be a decrease of roughly $53.3 million in property tax revenue. The estimated revenue loss would be roughly $14.8 million to the State General Revenue Fund, $20.8 million to local county school boards, $14.4 million to county commissions, and $3.6 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 2021 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., However, many local jurisdictions could initially raise their tax rates to recoup at least a portion of the loss.
Additional administrative costs cannot be determined. State tax databases would have to be reprogrammed, and other work would be needed to support the rollback.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2022
Increase/Decrease
(use"-") |
2023
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):
The bill, as written, provides that the assessed value of property is not greater than the assessed value in 2019. In addition, the bill defines market value and true and actual value as the value of all such property in 2019. The provisions of this bill are silent with regard to the valuation of new property or property additions subsequent to 2019.
Under the assumption of static tax rates during the first year of effect, there would be a decrease of roughly $53.3 million in property tax revenue. The estimated revenue loss would be roughly $14.8 million to the State General Revenue Fund, $20.8 million to local county school boards, $14.4 million to county commissions, and $3.6 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 2021 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., However, many local jurisdictions could initially raise their tax rates to recoup at least a portion of the loss.
Additional administrative costs cannot be determined. State tax databases would have to be reprogrammed, and other work would be needed to support the rollback.
Memorandum
The stated purpose of this bill is to provide definitions for “market value” and “true and actual value”; and that property taxes may not be appraised and assessed higher than the value in 2019.
The bill does not make provisions for property created after 2019 or upgrades to existing property.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov