Fiscal Note - SB 0419 - Changes in Income Levels in Formula For Determining Amount of Circuit Breaker Relief
L.R. NO. 1607-01
BILL NO. SB 419
SUBJECT: Property, Real and Personal-Taxation and Revenue-Property-Income
TYPE: Original
DATE: February 25, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
General Revenue $0 ($5,000,000) ($5,400,000)
Total Estimated
Net Effect on All
State Funds $0 ($5,000,000) ($5,400,000)
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government $0 $0 $0
FISCAL ANALYSIS
ASSUMPTION
Officials of the Department of Revenue (DOR) state this proposal would
increase the Property tax credit maximum income base and minimum income base.
By raising the income base additional taxpayers would be able to claim this
credit and more taxpayers would be able to claim a larger percentage of this
credit. It is anticipated that the volume of taxpayers affected by this
legislative change would be small and can be handled by existing personnel.
However, if the taxpayers using this credit increases by 10,000, personnel
and equipment would be requested through the budget process for both the
Division of Taxation and the Information Systems Division.
According to University of Missouri Research Center the criteria set up in
this proposal would not be met as drafted. The maximum upper limit of $20,000
could not be reached with the income increments set at $300 and the
accumulative percentage remaining currently the same and increasing the
minimum base to $6,800. The University of Missouri Research Center has
estimated that without this legislation the total number of projected circuit
breaker tax credits would be $16,300,000 for calendar year 1999 and
$15,900,000 for calendar year 2000. The projected number of circuit breaker
tax credits for this proposal would be $21,300,000 for FY98, FY99 and FY2000.
The difference of $5,000,000 would be the loss to General Revenue for FY99
and $5,400,000 for FY2000 due to this proposal.
Oversight assumes because the legislation would become effective for tax
years beginning after Dec. 31, 1997 that costs would not be accrued until
claims were filed in FY 99.
This proposal would result in a decrease in Total State Revenues since the
Individual Income tax collections are included in the calculation of Total
State Revenue.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(6 Mo.)
Loss to General Revenue Fund
Increase in circuit breaker
credit claims $0 ($5,000,000) ($5,400,000)
ESTIMATED NET EFFECT TO
GENERAL REVENUE FUND $0 ($5,000,000) ($5,400,000)
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(6 Mo.)
0 0 0
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of
this proposal.
DESCRIPTION
This act broadens the extent of property tax relief under the circuit breaker
law by increasing the "minimum base" amount for eligibility from the current
level of $5,900 to $6,800 and by increasing the "maximum upper limit" of
income from the current level of $15,000 to $20,000, and increases $200
income increments to $300.
This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.
SOURCES OF INFORMATION
Department of Revenue
University of Missouri Research Center
This Fiscal Note is not an official copy and should not be quoted or cited.