Property tax-assessment rate-3.

09LSO-0544.L1

                                                         

FISCAL NOTE

 

This bill contains an appropriation of $50,000,000 from the GENERAL FUND to the State Treasurer.

 

 

FY 2010

FY 2011

FY 2012

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue (Decrease):

 

 

 

AD VALOREM TAX

0

0

0

SCHOOL FOUNDATION FUND

0

(5,300,000)

(5,560,000)

 

Source of revenue decrease:

Reduction of the assessment rate on “all other property, real and personal” from 9.5% to 9.0%, and reduction of the assessment rate on industrial property from 11.5% to 11.0%, for the period from January 1, 2010 through December 31, 2011

 

Reduction of assessment rates will result in reduction of property tax revenues to local governments and the School Foundation Program.

 

Assumptions:

The above estimates are based on the assessment of industrial property and all other property for the 2008 tax year. The assessments of industrial property and all other property are forecasted to increase by 5% each year, according to January 2009 CREG projections.

 

It is estimated that the assessment rates proposed in the bill (11.0% for industrial property and 9.0% for all other property) will result in total decreases in assessed valuation of 441,500,000 in tax year 2010 and $463,600,000 in tax year 2011.

 

In 2008, the average mill levy applied to industrial and all other property was 66.696 mills. Mill levies are assumed to remain constant.

 

The projected revenue decrease in the 12 mill property tax paid to the School Foundation Program is estimated at $5,300,000 for tax year 2010 and $5,560,000 for tax year 2011. The projected revenue decrease in all other property taxes paid to local governments is estimated at $24,150,000 for tax year 2010 and $25,360,000 for tax year 2011. Local governments will receive reimbursement for the decreases in property taxes levied in tax year 2010 (FY 2011) and in tax year 2011 (FY 2012) by the $50 million appropriation in the bill, except for the 12 mills levied for payment to the School Foundation Program.

 

These reduced assessment rates are effective from January 1, 2010 through December 31, 2011, which will impact property taxes collected in FY 2011 and FY 2012.

 

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