SJR 004 - Fiscal Note

Fiscal Note - SJR 004 - Exempts real and personal property owned by senior citizens from property tax with a replacement tax

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO.: 0201-01

BILL NO.: SJR 4

SUBJECT: Constitutional Amendments: Taxation and Revenue - Elderly

TYPE: Original

DATE: January 8, 1999

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Blind Pension	$0	$0	($3,500,000)
General Revenue	$0	($125,000)	$0
Total Estimated Net Effect on All State Funds	$0	($125,000)	($3,500,000)

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
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 and the Department of Elementary and Secondary Education (DES) stated that the proposal would not affect their agencies, administratively.

DES officials also noted that school districts would receive their proportionate share of funds from the Merchants and Manufacturers Replacement Taxes (commercial property surtaxes). Therefore, there should not be any effect on the Foundation Formula.

Officials of the State TAX Commission estimated that the proposal would shift $680,000,000 in taxes to the commercial property surtaxes beginning with the 2001 assessment (FY 2002). Those surtaxes now yield about $130,000,000. They also noted that the State's Blind Pension Fund would not receive any replacement taxes and would lose about $3,500,000 beginning in FY 2002. (The assessed value of property affected would be about $11.67 billion by 2001. Property tax rates would average $5.82 per $100 assessed value. The Blind Pension tax is $.03 per $100 assessed value.)

Advertisement costs for the proposal would be $3,990 per newspaper column inch for three publications of the text of the proposal, the introduction, title, fiscal note summary, and affidavit. The proposal would be on the ballot for the November 2000 general election.

FISCAL IMPACT - State Government	FY 2000	FY 2001	FY 2002
GENERAL REVENUE FUND
Cost to General Revenue Fund
Secretary of State
Newspaper Advertisements	$0	($125,000)	$0
NET EFFECT ON GENERAL
REVENUE FUND	$0	($125,000)	$0
BLIND PENSION FUND
Loss - Decreased Tax Receipts	$0	$0	($3,500,000)
NET EFFECT ON BLIND
PENSION FUND	$0	$0	($3,500,000)
FISCAL IMPACT - Local Government	FY 2000	FY 2001	FY 2002
Income - Increase in Commercial Property
Surtax Collections	$0	$0	$680,000,000
Loss - Decrease in Real and Personal
Property Tax Collections	$0	$0	($680,000,000)
NET EFFECT ON POLITICAL
SUBDIVISIONS	$0	$0	$0
FISCAL IMPACT - Small Business

This proposal could affect property taxes paid by small businesses.

DESCRIPTION

This proposal would place before the voters of Missouri a proposal to exempt real and personal property of persons over sixty-four from property taxes and to replace local government revenues lost due to the exemption with increase in the taxes imposed on subclass 3 (commercial) property.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space. The proposal would affect Total State Revenue.

SOURCES OF INFORMATION

Department of Elementary and Secondary Education

Department of Revenue

Secretary of State

State Tax Commission

Jeanne Jarrett, CPA

Director

January 9, 1999