LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7052 NOTE PREPARED: Jan 2, 2025
BILL NUMBER: SB 391 BILL AMENDED:
SUBJECT: Political Subdivision Budgets.
FIRST AUTHOR: Sen. Buck BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: This bill provides that, notwithstanding any growth in a political subdivision's
assessed value in the previous year, a political subdivision's ad valorem property tax levy shall not exceed
the ad valorem property tax levy for its last preceding annual budget, unless the fiscal body of the political
subdivision adopts an affirmative tax rate and tax levy increase by ordinance following a separate public
hearing. It requires a resulting decrease in tax rates for each political subdivision in which there was an
increase in the political subdivision's assessed value in the previous year, subject to any affirmative tax rate
and tax levy increase adopted by the fiscal body of the political subdivision.
Effective Date: January 1, 2026.
Explanation of State Expenditures: Department of Local Government Finance (DLGF): This bill’s
provisions will result in an increase in the administrative workload for the DLGF. The DLGF will need to
update the Form 3, which is the form prescribed by the DLGF that local political subdivisions use to
advertise their proposed budget estimates and property tax levies for the upcoming fiscal year. This form will
need to be updated to account for any ordinance adopted by the respective political subdivision’s fiscal body
that approves an increase in property tax levies and rates for the upcoming fiscal year.
Furthermore, the DLGF’s Budget Division will have to incorporate an additional step in its review and
certification process of the local political subdivisions’ annual budget estimates and property tax levies and
rates. The additional step will ensure that local political subdivisions are adhering to the property tax levy
growth limitations specified in their respective governing fiscal body’s adopted ordinance.
Explanation of State Revenues:
Explanation of Local Expenditures: This bill’s provisions will result in a minor increase in the
administrative workload for the fiscal bodies of the political subdivisions since they will be required to hold
a separate public hearing on an ordinance that would allow the political subdivision to increase their property
tax levies and tax rates for the upcoming fiscal year in comparison to the current fiscal year.
SB 391 1 Explanation of Local Revenues: The bill’s provisions may result in a decrease in anticipated property tax
levy for local political subdivisions should their respective fiscal bodies not adopt an ordinance that would
approve an increase in levies and property tax rates for the upcoming fiscal year. Under that scenario, a
political subdivision would be capped at their current year property tax levy and would not receive any
increase in levy that they might be budgeting for in the upcoming fiscal year. The actual fiscal impact will
vary from local political subdivisions and will be contingent on the decisions of the respective fiscal bodies.
State Agencies Affected: Department of Local Government Finance.
Local Agencies Affected: Local political subdivisions.
Information Sources:
Fiscal Analyst: James Johnson, 317-232-9869.
SB 391 2