Subject: Elderly; Revenue Dept.; Taxation and Revenue - General; Taxation and Revenue - Income; Taxation and Revenue - Property

Bill Summary: Would change senior citizens property tax relief provisions and extend the assessment fund withholding from local property tax collections.

ESTIMATED NET EFFECT ON GENERAL REVENUE FUND
FUND AFFECTED	FY 2009	FY 2010	FY 2011
General Revenue	($11,965,819)	($11,977,759)	($11,986,091)

Total Estimated Net Effect on General Revenue Fund	($11,965,819)	($11,977,759)	($11,986,091)

ESTIMATED NET EFFECT ON OTHER STATE FUNDS
FUND AFFECTED	FY 2009	FY 2010	FY 2011


Total Estimated Net Effect on Other State Funds	$0	$0	$0

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 2009	FY 2010	FY 2011


Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)
FUND AFFECTED	FY 2009	FY 2010	FY 2011
General Revenue	8	8	8

Total Estimated Net Effect on FTE	8	8	8

☐ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).

☒ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 2009	FY 2010	FY 2011
Local Government *	$0	$0	$0

Officials from the Office of Administration, Division of Budget and Planning (BAP) assume there would be no added cost to the Office of Administration/Budget and Planning as a result of this proposal.

BAP officials stated that the proposal would make numerous changes to the Senior Property Tax Credit Program. BAP defers to DOR for an estimate of the fiscal impact to the state General Revenue Fund.

Officials from the Department of Revenue (DOR) noted that this proposal would change the Senior Citizens Property Tax Credit program. DOR officials assume that this proposal would require refunds issued by the state to increase and in essence, decrease General Revenue. DOR officials also stated that this proposal would extend the sunset date for assessment fund withholding from local property tax collections.

DOR submitted a cost estimate to implement this proposal including eight additional FTE and related equipment and expense, totaling $319,063 for FY 2009, $340,296 for FY 2010, and $350,505 for FY 2011.

DOR officials also provided an estimate of the IT cost to implement the proposal from the Office of Administration, Information Technology Services Division (ITSD/DOR). ITSD/DOR assumes the IT portion of this request could be accomplished within existing resources, however; if priorities shift, additional FTE/overtime would be needed. ITSD/DOR) estimates that this legislation could be implemented utilizing 2 existing CIT III for 3 months for modifications to MINITS at a total cost of $25,116.

Oversight has, for fiscal note purposes only, changed the starting salary the additional positions to correspond to the second step above minimum for comparable positions in the state's merit system pay grid. This decision reflects a study of actual starting salaries for new state employees for a six month period and the policy of the Oversight Subcommittee of the Joint Committee on Legislative Research. Oversight has also adjusted equipment and expense amounts in accordance with OA Budget Guidelines, and Oversight assumes the limited number of additional FTE could be accommodated in existing office space.

Officials from the State Tax Commission (TAX) assume this proposal would have no fiscal impact on their organization. TAX officials also provided statewide annual assessment fund totals of $3.71 million for 2005 (FY 2006) and $3.83 million for 2006 (FY 2007).

Oversight notes that this proposal would extend the sunset for assessment fund withholding from December 31, 2009 (FY 2010) to December 31, 2012 (FY 2013). Oversight assumes that assessment fund withholding for FY 2010 would have been collected on or before December 31, 2009 and there would be no significant fiscal impact on FY 2010. Oversight will include an estimate of the assessment fund withholding for FY 2011 in this fiscal note.

Officials from the University of Missouri, Economic and Policy Analysis Research Center (EPARC) assume this proposal would change the senior citizen property tax credit program. The proposal would increase the upper limit to $43,500, increase the minimum base to $17,000, increase the spouse exemption to $10,500, and increase the maximum credit to $1,100. EPARC estimated that the proposal would the result in an increase in credits of $11.7 million per year.

Oversight will use the EPARC estimate of additional tax credits for this fiscal note.

Officials from the Office of the St. Louis County Collector assume this proposal would have no fiscal impact on their organization.

Officials from Clinton County assume this proposal could result in a loss of revenue to their organization and a gain to their citizens. Clinton County officials stated that there could be minor costs to educate the taxpayers, and noted that there could be revenue reductions for the taxing authorities.

No direct fiscal impact to small businesses would be expected as a result of this proposal.

The proposed legislation would change senior citizens property tax relief provisions and extend the assessment fund withholding from local property tax collections.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

FISCAL IMPACT - State Government	FY 2009 (10 Mo.)	FY 2010	FY 2011
GENERAL REVENUE FUND

Revenue reduction - additional tax credits	($11,700,000)	($11,700,000)	($11,700,000)

Cost - Department of Revenue
Personal Service - 8 FTE	($146,800)	($181,445)	($186,888)
Temporary employees	($6,695)	($8,275)	($8,523)
Fringe Benefits	($67,875)	($83,894)	($86,411)
Expense and Equipment	($44,449)	($4,145)	($4,269)
	($265,819)	($277,759)	($286,091)

ESTIMATED NET EFFECT ON GENERAL REVENUE FUND	($11,965,819)	($11,977,759)	($11,986,091)

Estimated Net FTE Effect on General Revenue Fund	8	8	8

FISCAL IMPACT - Local Government	FY 2009 (10 Mo.)	FY 2010	FY 2011
LOCAL GOVERNMENTS

Revenue increase - County assessment funds	$0	$0	$4,280,000

Revenue reduction - Taxing authorities	$0	$0	($4,280,000)

ESTIMATED NET EFFECT ON LOCAL GOVERNMENTS	$0	$0	$0