SB 0564 - Fiscal Note

Fiscal Note - SB 0564 - Increases income levels in property tax circuit breaker law

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 2525-01

BILL NO. SB 564

SUBJECT: Taxation and Revenue-Property: Elderly

TYPE: Original

DATE: December 17, 1997

---

FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
General Revenue	$0	($14,200,000)	($14,800,000)
Total Estimated Net Effect on All State Funds	$0	($14,200,000)	($14,800,000)

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
None
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Local Government	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 3 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials of the Department of Revenue (DOR) state this proposal would increase the property tax credit income base. By raising the income base additional taxpayers would be able to claim this credit. It is anticipated that the volume of taxpayers affected by this legislative change would 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.

Oversight received figures from the University of Missouri Research Center for the amount of total credits claimed. The University of Missouri Research Center has estimated that without this legislation the total number of projected circuit breaker tax credits would be $15,900,000 in tax year 1999, $15,300,000 in 2000 and $14,800,000 in 2001. The projected amount of circuit breaker tax credits for this proposal would be $30,100,000. The difference of $14,200,000, $14,800,000 and $15,300,000 respectively, would be the loss to General Revenue for this proposal. Oversight assumes because the legislation would become effective for calendar years beginning on Jan. 1, 1999 that costs would not be accrued until claims were filed in FY2000 and FY2001.

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 1999	FY 2000	FY 2001
	(10 Mo.)
Loss to General Revenue Fund
Increase in circuit breaker
credit claims	$0	($14,200,000)	($14,800,000)
ESTIMATED NET EFFECT TO
GENERAL REVENUE FUND	$0	($14,200,000)	($14,800,000)
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	(10 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 proposal changes elements in the property tax circuit breaker law. Under current law, the maximum upper limit income level is $15,000; this proposal increases that limit to $25,000 for 1999 and succeeding years. The minimum base income level, under which a claimant can receive the full amount of the property tax credit up to the statutory limit, is increased from the current $5,900 to $13,000 for 1999 and succeeding years. This proposal has an effective date of January 1, 1999.

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

Jeanne Jarrett, CPA

Director

December 17, 1997