Property tax assessment rate.

09LSO-0576.L2

                                                         

FISCAL NOTE

 

FY 2010

FY 2011

FY 2012

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue Increase (Decrease):

 

 

 

AD VALOREM TAX

0

(83,180,000)

(87,350,000)

SCHOOL FOUNDATION FUND

0

(18,250,000)

(19,160,000)

 

Source of revenue decrease:

Reduction of the assessment rate on “all other property, real and personal” from 9.5% to 7.5%, and reduction of the assessment rate on industrial property from 11.5% to 10.5%

 

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 (10.5% for industrial property and 7.5% for all other property) will result in total decreases in assessed valuation of $1,520,800,000 for tax year 2010 and $1,596,900,000 for 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 $18,250,000 for tax year 2010 and $19,160,000 for tax year 2011. The projected revenue decrease in all other property taxes paid to local governments is estimated at $83,180,000 for tax year 2010 and $87,350,000 for tax year 2011.  The decrease in property taxes to local governments will also decrease the 31 mills K-12 local resource, which will also result in a combination of increased expenditures and decreased revenues to the School Foundation Program of approximately $47.14 million in FY 2011 and $49.5 million in FY 2012.

 

These reduced assessment rates are effective beginning January 1, 2010, which will impact property taxes collected beginning in FY 2011.

 

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