Property Tax Legislation Would Affect Local Government Revenues
Senate Bill 2073 seeks to amend the Property Tax Extension Limitation Law (PTELL) to prevent a taxing body whose total assessed value decreases from the previous year, excluding new construction, from collecting any increase by setting the district’s tax cap to zero unless voters approve an increase by referendum. The PTELL, or tax cap, limits the annual increase that taxing bodies can receive to either the rate of inflation or 5 percent, whichever is less.
Most local governments have already seen significant drops in tax revenues over the past few years due to decreasing home values and the lack of new construction, requiring them to either shrink their budgets through layoffs and reductions in services or to find new sources of revenue such as fees and non-property taxes, or both. If passed, this new legislation will certainly affect the level of services provided by local governments to their residents.
Most local governments have already seen significant drops in tax revenues over the past few years due to decreasing home values and the lack of new construction, requiring them to either shrink their budgets through layoffs and reductions in services or to find new sources of revenue such as fees and non-property taxes, or both. If passed, this new legislation will certainly affect the level of services provided by local governments to their residents.
The bill, which passed the House by a vote of 74-39, still has to return to the Senate for a concurrence vote.
Post Authored by Julie Tappendorf, Ancel Glink
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