FISCAL NOTE
Date Requested: January 29, 2019
Time Requested: 08:59 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2975 |
Introduced |
SB451 |
|
|---|
| CBD Subject: |
Education (K12) |
|---|
|
FUND(S):
General Revenue Fund, county boards of education
Sources of Revenue:
General Fund local property tax revenue
Legislation creates:
Increases Revenue From Existing Sources, 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 comprehensive public education reform.
This proposed bill creates a Personal Income Tax credit of up to $250 for classroom teachers employed by a public or private school for the purchase of supplementary education materials or professional development costs. However, the bill is silent on a number of other provisions, including but not limited to whether a qualifying teacher may teach in a public or private school, if the teacher must be a West Virginia resident, or if the teacher must teach in a West Virginia school. For the purpose of this analysis, we assume a qualifying teacher must teach in a West Virginia-based primary or secondary school and that teachers in either public or private settings would qualify. Based on our understanding, the revenue loss from this credit for classroom teachers would be $5.0 million per year beginning in FY2020.
In addition, the bill would increase the maximum levy rate for county boards of education. If all county boards of education increased their levy rates to the new maximums, Property Tax revenue for county school boards would initially increase by $106 million by as early as FY 2021. We are unable to determine how many school boards would elect to increase their levy rates or by how much.
The new tax credit for teachers would result in an increase in costs to the State Tax Department of $56,000 in FY2020 and $40,000 in subsequent fiscal years. No additional administrative costs would be incurred by the State or local governments as a result of the change in maximum Property Tax rates.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2019
Increase/Decrease
(use"-") |
2020
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
56,000 |
40,000 |
| Personal Services |
0 |
40,000 |
40,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,000 |
0 |
| Other |
0 |
15,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
This proposed bill creates a Personal Income Tax credit of up to $250 for classroom teachers employed by a public or private school for the purchase of supplementary education materials or professional development costs. However, the bill is silent on a number of other provisions, including but not limited to whether a qualifying teacher may teach in a public or private school, if the teacher must be a West Virginia resident, or if the teacher must teach in a West Virginia school. For the purpose of this analysis, we assume a qualifying teacher must teach in a West Virginia-based primary or secondary school and that teachers in either public or private settings would qualify. Based on our understanding, the revenue loss from this credit for classroom teachers would be $5.0 million per year beginning in FY2020.
In addition, the bill would increase the maximum levy rate for county boards of education. If all county boards of education increased their levy rates to the new maximums, Property Tax revenue for county school boards would initially increase by $106 million by as early as FY 2021. We are unable to determine how many school boards would elect to increase their levy rates or by how much.
The new tax credit for teachers would result in an increase in costs to the State Tax Department of $56,000 in FY2020 and $40,000 in subsequent fiscal years. No additional administrative costs would be incurred by the State or local governments as a result of the change in maximum Property Tax rates.
Memorandum
The stated purpose of this bill is comprehensive public education reform.
As written, the proposed bill does not define “classroom teachers”. The proposed bill makes no distinction between public or private education. Language of the proposed bill does not provide sufficient guidance as to residency or school location requirements. As written, the proposed bill does not appear to limit the tax credit to classroom teachers in this State. It is plausible that a West Virginia resident who teaches in a neighboring state or a non-resident teacher who must file a Personal Income Tax return in West Virginia may qualify. The term “qualified educational expenses” is broadly defined.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov