FISCAL NOTE
Date Requested: January 16, 2026
Time Requested: 03:06 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1605 |
Introduced |
HB4455 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund 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.
The stated purpose of this bill is to provide for a phased in increase in the homestead exemption; provide that change to exemption contingent on passage of constitutional amendment; remove cap on property tax books, and repeal limitation on levy rates when appraisal results in tax increase.
Under the provisions of this bill, beginning on January 1, 2028, the value of the Homestead Exemption would initially increase from $20,000 to $25,000. The exemption would be further increased to $30,000 on January 1, 2029, $35,000 on January 1, 2030, and to $40,000 on January 1, 2031.
This increase in the Homestead Exemption from $20,000 to $25,000 would result in a revenue loss of $12.0 million annually. The estimated revenue loss would be roughly $3.4 million to the State General Revenue Fund, $4.6 million to local county school boards, $3.2 million to county commissions and $800,000 to municipalities. The distribution of estimated cost is based on information from taxes levied as reported in the Classified Assessed Valuations Taxes Levied for 2025 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.
The Homestead Exemption would increase to $30,000 in 2029. This increase would result in a total revenue loss from current law of $23.5 million annually. The estimated revenue loss would be roughly $6.6 million to the State General Revenue Fund, $9.1 million to local county school boards, $6.3 million to county commissions and $1.5 million to municipalities.
The Homestead Exemption would increase to $35,000 in 2030. This increase would result in a total revenue loss from current law of $34.4 million annually. The estimated revenue loss would be roughly $9.6 million to the State General Revenue Fund, $13.3 million to local county school boards, $9.2 million to county commissions and $2.3 million to municipalities.
The Homestead Exemption would increase to $40,000 in 2031. This increase would result in a total revenue loss from current law of $44.0 million annually. The estimated revenue loss would be roughly $12.3 million to the State General Revenue Fund, $17.0 million to local county school boards, $11.8 million to county commissions and $2.9 million to municipalities.
In addition, the bill repeals §11-8-6e which provides that the levy shall be reduced when the general valuation of property would produce an assessment giving rise to an increase of 1 percent or more in projected tax revenues. The revenue impact of the repeal of this section cannot be determined. However, the removal of the cap would effectively result in higher property tax rates in affected jurisdictions than tax rates in place with the cap.
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 |
2026
Increase/Decrease
(use"-") |
2027
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 |
-44,000,000 |
Explanation of above estimates (including long-range effect):
Under the provisions of this bill, beginning on January 1, 2028, the value of the Homestead Exemption would initially increase from $20,000 to $25,000. The exemption would be further increased to $30,000 on January 1, 2029, $35,000 on January 1, 2030, and to $40,000 on January 1, 2031.
This increase in the Homestead Exemption from $20,000 to $25,000 would result in a revenue loss of $12.0 million annually. The estimated revenue loss would be roughly $3.4 million to the State General Revenue Fund, $4.6 million to local county school boards, $3.2 million to county commissions and $800,000 to municipalities. The distribution of estimated cost is based on information from taxes levied as reported in the Classified Assessed Valuations Taxes Levied for 2025 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.
The Homestead Exemption would increase to $30,000 in 2029. This increase would result in a total revenue loss from current law of $23.5 million annually. The estimated revenue loss would be roughly $6.6 million to the State General Revenue Fund, $9.1 million to local county school boards, $6.3 million to county commissions and $1.5 million to municipalities.
The Homestead Exemption would increase to $35,000 in 2030. This increase would result in a total revenue loss from current law of $34.4 million annually. The estimated revenue loss would be roughly $9.6 million to the State General Revenue Fund, $13.3 million to local county school boards, $9.2 million to county commissions and $2.3 million to municipalities.
The Homestead Exemption would increase to $40,000 in 2031. This increase would result in a total revenue loss from current law of $44.0 million annually. The estimated revenue loss would be roughly $12.3 million to the State General Revenue Fund, $17.0 million to local county school boards, $11.8 million to county commissions and $2.9 million to municipalities.
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.
In addition, the bill repeals §11-8-6e which provides that the levy shall be reduced when the general valuation of property would produce an assessment giving rise to an increase of 1 percent or more in projected tax revenues. The revenue impact of the repeal of this section cannot be determined. However, the removal of the cap would effectively result in higher property tax rates in affected jurisdictions than tax rates in place with the cap.
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
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov