FISCAL NOTE
Date Requested: February 26, 2025
Time Requested: 06:28 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3251 |
Introduced |
HB2969 |
|
|---|
| 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 increase the homestead exemption allowed.
Under the provisions of this bill, the value of the Homestead Exemption would be initially increased from $20,000 to $30,000. The exemption would be further increased to $35,000 in 2028 and to $40,000 in 2030.
This increase in the Homestead Exemption from $20,000 to $30,000 would result in a revenue loss of $23.1 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, $6.1 million to county commissions and $1.3 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.
The Homestead Exemption would increase to $35,000 in 2028. This increase would result in a total revenue loss from current law of $33.6 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, $8.8 million to county commissions and $1.9 million to municipalities.
The Homestead Exemption would increase to $40,000 in 2030. This increase would result in a total revenue loss from current law of $44.0 million annually. The estimated revenue loss would be roughly $12.6 million to the State General Revenue Fund, $17.4 million to local county school boards, $11.5 million to county commissions and $2.5 million to municipalities.
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 |
-44,000,000 |
Explanation of above estimates (including long-range effect):
Under the provisions of this bill, the value of the Homestead Exemption would be initially increased from $20,000 to $30,000. The exemption would be further increased to $35,000 in 2028 and to $40,000 in 2030.
This increase in the Homestead Exemption from $20,000 to $30,000 would result in a revenue loss of $23.1 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, $6.1 million to county commissions and $1.3 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.
The Homestead Exemption would increase to $35,000 in 2028. This increase would result in a total revenue loss from current law of $33.6 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, $8.8 million to county commissions and $1.9 million to municipalities.
The Homestead Exemption would increase to $40,000 in 2030. This increase would result in a total revenue loss from current law of $44.0 million annually. The estimated revenue loss would be roughly $12.6 million to the State General Revenue Fund, $17.4 million to local county school boards, $11.5 million to county commissions and $2.5 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.
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