Property tax assessment rate.

08LSO-0038.L1

FISCAL NOTE

	FY 2009	FY 2010	FY 2011
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue (Decrease):
AD VALOREM TAX	0	(65,247,000)	(65,247,000)
SCHOOL FOUNDATION FUND	0	(14,323,000)	(14,323,000)

Source of revenue decrease:

Reduction of assessment rate of industrial property from 11.5% to 10.5%. Reduction of assessment rate of all other real and personal property from 9.5% to 7.5%

Reduced level of assessment will result in reduction of property tax revenue to local governments and the School Foundation Program.

Assumptions:

The above estimates are based on the property assessment for tax year 2007.

In 2007, the average state wide mill levy was 67.135 mills. Assessed valuations and mill levies are assumed to remain constant.

Total assessed value of industrial property at 11.5% was $2,172,284,860 x 67.135 mills (.067135) = $145,836,000 in taxes.

The same property valued at 10.5% has an assessed value of $1,983,390,524 x 67.135 mills (.067135) = $133,155,000 in taxes.

The reduction in taxes for industrial property currently valued at 11.5% is $12,681,000 ($145,836,000 - $133,155,000).

All other property that was valued at 9.5% had a 2007 assessed value of $4,732,602,120 x 67.135 mills (.067135) = $317,723,000 in taxes.

The same property assessed at 7.5% has an assessed value of $3,736,264,832 x 67.135 mills (.067135) = $250,834,000 in taxes.

The reduction in taxes for property currently valued at 9.5% is $66,889,000 ($317,723,000 - $250,834,000)

Total reduction in tax dollars collected at the county level for all purposes is $79,570,000 ($66,889,000 + $12,681,000 = $79,570,000).

School Foundation program of 12 mills represents approximately 18% of statewide average mill levy of 67.135 mills ($79,570,000 x 18% = $14,323,000)

This bill is effective January 1, 2009, which will impact property taxes collected in FY 2010.

Prepared by:   Dean Temte, LSO  Phone: 777-7881

(Information provided by Marvin Applequist, Dept. of Revenue; 777-5235)