Property tax-assessed value.

09LSO-0442.L4

FISCAL NOTE

This bill contains an appropriation of $23,940,000 from the GENERAL FUND to the State Treasurer.  This appropriation is effective immediately.

	FY 2010	FY 2011	FY 2012
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue (Decrease):
AD VALOREM TAX	0	(15,530,000)	(16,310,000)
SCHOOL FOUNDATION FUND	(5,250,000)	(3,410,000)	(3,580,000)

Source of revenue decrease: Property tax exemption on the assessed value of all other property which exceeds the average assessed value for the current year and the 2 calendar years immediately preceding

Assumptions:

The above estimate is based on the assessment of all other property (assessed at 9.5%) for the tax years 2007 and 2008. The assessed value of all other property is forecasted to increase by 5% each year, according to January 2009 CREG projections.

It is estimated that exempting the assessed value of all other property that exceeds the 3 year average (current year and 2 calendar years immediately preceding) would decrease the assessed valuation by $437,700,000 in tax year 2009, by $283,960,000 in tax year 2010, and by $298,160,000 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 $5,250,000 for tax year 2009, $3,410,000 for tax year 2010, and $3,580,000 in tax year 2011. The projected revenue decrease in all other property taxes paid to local governments is estimated at $23,940,000 for tax year 2009, $15,530,000 for tax year 2010 and $16,310,000 for tax year 2011. Local governments will receive reimbursement for the decrease in property taxes levied in tax year 2009 (FY 2010) by the $23.94 million appropriation in the bill, except for the 12 mills levied for payment to the School Foundation Program. The decrease in property taxes to local governments in FY 2011 and FY 2012 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 $8.8 million in FY 2011 and $9.2 million in FY 2012.

[page 1 of 2]

This bill shall apply to property taxes imposed on or after January 1, 2009, which will impact property taxes collected beginning in FY 2010.

NOTICE-AGENCY ESTIMATE OF ADMINISTRATIVE IMPACT REQUESTED

This bill has administrative impact that appears to increase (or decrease) duties or responsibilities of one or more state agencies and may impact agency spending or staffing requirements. As introduced, the bill does not modify any state agency budget or current personnel authorizations.

The following state agencies will be asked to provide their estimate of the administrative fiscal impact prior to the first committee meeting held to consider the bill:

Department of Revenue

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