FISCAL NOTE
Date Requested: February 13, 2021
Time Requested: 02:29 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2045 |
Introduced |
SB282 |
|
|---|
| CBD Subject: |
Real and Personal Property |
|---|
|
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 limit the increase in valuation of residential property when improvements are made to such property.
This bill would limit the increase in property valuation for improvements to residential property initially to not more than 5 percent of the previous valuation. Under the assumption of static tax rates, the initial revenue loss during the first full year of effect is estimated to be roughly $5.5 million to the State General Revenue Fund, $7.7 million to local county school boards, $5.3 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 2020 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. Many local jurisdictions have some ability to adjust their tax rates on property to offset any revenue loss. The result would be some shift of tax liability from residential real estate to all other types of taxable properties.
Additional administrative costs to the State and counties would be minimal.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2021
Increase/Decrease
(use"-") |
2022
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 |
-19,800,000 |
Explanation of above estimates (including long-range effect):
This bill would limit the increase in property valuation for improvements to residential property initially to not more than 5 percent of the previous valuation. Under the assumption of static tax rates, the initial revenue loss during the first full year of effect is estimated to be roughly $5.5 million to the State General Revenue Fund, $7.7 million to local county school boards, $5.3 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 2020 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. Many local jurisdictions have some ability to adjust their tax rates on property to offset any revenue loss. The result would be some shift of tax liability from residential real estate to all other types of taxable properties.
Additional administrative costs to the State and counties would be minimal.
Memorandum
The stated purpose of this bill is to limit the increase in valuation of residential property when improvements are made to such property.
Article X, Section 1 of the W. Va. Constitution requires taxation to be equal and uniform throughout the State, property to be taxed in proportion to its value, and no one species of property be taxed higher than any other species of property of equal value. The bill limits the increased appraisal of real property to which improvements have been made to 5 percent. This would not be equal taxation nor would the improved property be taxed in proportion to its value.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov