Long-term homeowner tax exemption-revisions.25LSO-0170, 1.0
SF0067
FISCAL NOTE
FY 2026FY 2027FY 2028NON-ADMINISTRATIVE IMPACTAnticipated Revenue (decrease)SCHOOL FOUNDATION FUND($0)Indeterminable($19,800,000)AD VALOREM TAX($0)Indeterminable($11,700,000)
Source of revenue (decrease):
This bill amends the long-term homeowner tax exemption by reducing the residency
requirement from 8 months to 6 months and removes the qualification of a
surviving spouse who would not otherwise qualify, beginning January 1, 2026. The
fiscal impact of these two qualification changes is indeterminable. This bill
also repeals the exemption sunset, decreasing property taxes beginning in tax
year 2027 (FY 2028). The estimated decreases in property tax revenues to the
School Foundation Program (SFP) and to other local taxing entities from the
sunset repeal are provided in the above table.
The SFP will experience a revenue decrease from the 43 mills supporting K-12
public education, which include the statewide 12 mill levy, the school district
25 mill levy, and the countywide 6 mill levy. For purposes of this analysis, the
decrease in property tax revenues to the SFP is shown as an absolute revenue
decrease in lieu of estimating the school district recapture revenue decrease and
school district entitlement expenditure increase separately.
Assumptions:
The above estimate assumes 23,000 qualifying applications, an average assessed
value exemption of $20,000 and the 2024 tax year average mill levy of 68.504
mills. Based on the information above, this bill would decrease total property
taxes by approximately $31.5 million in tax year 2027 (FY 2028). Of the estimated
total impact, the decreased revenue from the 43 mills supporting the SFP is
approximately $19.8 million in tax year 2027 (FY 2028).
This bill may require the Legislature to appropriate additional funds from the
SFP for increased entitlement payments to ensure sufficient funding is available
to offset the reduction in revenue generated by the school district 25 mill levy
and countywide 6 mill levy.
Prepared by: Dean Temte, LSO Phone: 777-7881
(Information provided by Kenneth Guille, Department of Revenue, 777-5235)