This Fiscal Note is not an official copy and should not be quoted or cited.
This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0973 - Increases prop. tax withholdings for collection and assess- ment costs; recuces state aid deduction for school taxes
COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO. 3969-01
BILL NO. SB 973
SUBJECT: Taxation and Revenue: Property Tax
TYPE: Original
DATE: March 30, 1998
FISCAL SUMMARY
|
ESTIMATED NET EFFECT ON STATE FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| General Revenue | $0 | ($18,370,000) | ($34,440,000) |
| Other | $0 | (Unknown) | (Unknown) |
| Total Estimated
Net Effect on All State Funds |
$0 | ($18,370,000) | ($34,440,000) |
|
ESTIMATED NET EFFECT ON FEDERAL FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| 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 | $16,000,000 | $32,000,000 |
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 4 pages.
FISCAL ANALYSIS
ASSUMPTION
Officials of the State Tax Commission estimate increased costs to the state for $7 per parcel reimbursement and 60% assessment cost reimbursement would be about $2,300,000 per year. They estimate increases of almost $5,000,000 per year to county assessment funds.
Officials of the Department of Elementary and Secondary Education estimate increased costs due to changes in section 163.031 would be approximately $16,000,000 in FY 2000 and $32,000,000 per year subsequently.
| FISCAL IMPACT - State Government | FY 1999 | FY 2000 | FY 2001 |
| (12 Mo.) | |||
| GENERAL REVENUE FUND | |||
| Cost-Department of Elementary and Secondary | |||
| Education | |||
| Increased distributions to school districts | $0 | ($16,000,000) | ($32,000,000) |
| Cost-State Tax Commission | |||
| Increased per parcel matching of county | |||
| assessment funds | $0 | ($2,370,000) | ($2,440,000) |
| NET EFFECT ON GENERAL REVENUE | |||
| FUND | $0 | ($18,370,000) | ($34,440,000) |
| OTHER STATE FUNDS | |||
| Loss-Increased Collector Fees | (Unknown) | (Unknown) | (Unknown) |
| NET EFFECT ON OTHER | |||
| STATE FUNDS | (UNKNOWN) | (UNKNOWN) | (UNKNOWN) |
| FISCAL IMPACT - Local Government | FY 1999 | FY 2000 | FY 2001 |
| (6 Mo.) | |||
| POLITICAL SUBDIVISIONS | |||
| Income-General Revenue Funds | |||
| Increased Collector Fees | Unknown | Unknown | Unknown |
| FISCAL IMPACT - Local Government | FY 1999 | FY 2000 | FY 2001 |
| (continued) | (6 Mo.) | ||
| Income-Assessment Funds | |||
| Increased Assessor Fees | $0 | $4,850,000 | $5,000,000 |
| Income-School Districts | |||
| Increased Distributions from State | $0 | $16,000,000 | $32,000,000 |
| Loss-Other Subdivision funds | |||
| Increased Assessor Fees | $0 | ($4,850,000) | ($5,000,000) |
| Loss-Other Subdivision funds | |||
| Increased Collector Fees | $0 | (Unknown) | (Unknown) |
| NET EFFECT ON POLITICAL | |||
| SUBDIVISIONS | $0 | $16,000,000 | $32,000,000 |
| FISCAL IMPACT - Small Business | |||
No direct fiscal effect on small businesses would be expected due to this proposal.
DESCRIPTION
This proposal would:
1) increase county collectors' fees;
2) add an additional fee which would go into a Tax Maintenance Fund for each county;
3) increase the percentage of property tax collections placed in county assessment funds by 25%;
4) increase state reimbursement of assessors for reassessment from up to 50% of costs and expenses to up to 60% of costs and expenses;
5) decrease the amount counties have to spend from assessment maintenance funds in order to qualify for more than the minimum $3 per parcel reimbursement;
6) increase the per-parcel payment to assessors in 1999 to $7 (from a maximum of $6.20 per parcel under current law) and increase the per-parcel payment 3% per year with the proviso that the amount reimbursed by the state not exceed 605 of costs and expenses;
DESCRIPTION (continued)
7) decrease reimbursement to counties which did not appropriate from county general revenue to their reassessment funds at least an amount equal to the average amount appropriated for the previous three years by the 25% increase in taxes going to county assessment funds;
8) require the State Tax Commission to certify equivalent sales ratios for each school district higher than thirty one percent (currently thirty-one and two-thirds) and allow the State Tax Commission to reduce the county's reimbursement by fifteen percent only if the equivalent sales ratio would be less than or equal to thirty one percent for three consecutive years;
9) establish a procedure to be followed when a county, a county assessor and the tax Commission cannot agree on an assessment plan (the new statute would incorporate the interpretation made by the state's Supreme Court);
10) change the state aid formula for school district entitlement by using 99% of the value on line 2 of the formula in FY 2000 and 98% in subsequent years (rather than 100% as in current law); and
11) give "hold harmless" districts additional payments of 1% of districts' deduction on line 2 of the formula;
Points 1) through 9) above have an effective date of January 1, 1999.
Points 10) and 11) above have an effective date of July 1, 1999.
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space. This legislation would not affect Total State Revenue.
SOURCES OF INFORMATION
Department of Elementary and Secondary Education
State Tax Commission
Cole County Assessor
Jeanne Jarrett, CPA
Director
March 30, 1998