COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 3217-02
Bill No.: SB 648
Subject: Taxation & Revenue-Property; Political Subdivisions; City of Saint Louis
Type: Original
Date: January 21, 2002
FISCAL SUMMARY
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| Total Estimated
Net Effect on All State Funds * |
$0 | $0 | $0 |
*Does not include possible increased cost for Foundation Formula.
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| Political subdivisions | $0 - (Unknown) | $0 - (Unknown) | $0 - (Unknown) |
| Local Government | $0 - (Unknown) | $0 - (Unknown) | $0 - (Unknown) |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 4 pages.
ASSUMPTION
Officials from the office of the Secretary of State assume no fiscal impact to their organization.
Officials from the Department of Revenue assume no administrative impact to their agency.
In response to a similar proposal, officials from the State Tax Commission assume 2002 assessed valuation is $70 billion and property tax revenue amounts to $4.2 billion for local political subdivisions. Assuming 3.5% CPI growth, the potential loss in local revenues would be $4.2 billion times 3.5% resulting in $147 million. Assuming no growth in 2004 and an increase in assessed valuation due to new construction or improvements of $1.8 billion, the potential loss in revenues for 2005 would be $71.8 billion times tax rate of $6 per $100 assessed valuation times 3.5% CPI equaling $151 million.
In a more recent response, the State Tax Commission provided an updated estimate of $68 billion for 2002 assessed valuation.
Oversight assumes there could be lost tax revenues to political subdivisions but only after one or more political subdivisions voted to eliminate the property tax rollback inflation adjustment. Oversight assumes elections (if any) could be held beginning in FY 2003, and the first year taxes could be affected by the proposal would be 2003 taxes collected in FY 2004. Oversight has ranged the impact in reduced tax collections, and potential local elections costs from $0 to Unknown.
Officials of the Department of Elementary and Secondary Education, in response to a similar proposal in a prior session, noted that the proposal would reduce the local deductions in the Foundation Formula thus increasing cost to fully fund the Formula.
Oversight assumes the Foundation Formula issues, if any, would be addressed through the appropriation process and has not included any provision for increases in foundation formula funding in the fiscal impact.
| FISCAL IMPACT - State Government | FY 2003
(10 Mo.) |
FY 2004 | FY 2005 |
| $0 | $0 | $0 |
| FISCAL IMPACT - Local Government | FY 2003
(10 Mo.) |
FY 2004 | FY 2005 |
| POLITICAL SUBDIVISIONS | |||
| Loss - Reduced Property Tax Collections | $0 - (Unknown) | $0 - (Unknown) | $0 - (Unknown) |
| Cost - Local elections | $0 - (Unknown) | $0 - (Unknown) | $0 - (Unknown) |
| NET EFFECT ON POLITICAL SUBDIVISIONS |
$0 - (Unknown) |
$0 - (Unknown) |
$0 - (Unknown) |
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
DESCRIPTION
This proposal would allow counties and the City of St. Louis to vote to eliminate property tax levy rollback adjustments for inflation. The local option could be approved by the governing body by ordinance, the option could be submitted to the voters, or the voters could initiate the option by referendum.
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
Secretary of State
Department of Revenue
NOT RESPONDING
State Tax Commission
Mickey Wilson, CPA
Acting Director
January 21, 2002