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This plan outlines reforming personal property tax to enhance state revenue utilization by transferring excess funds to local communities for essential services and debt loss. Calculate the impact on local taxing units, schools, and essential services with detailed distribution and reimbursement strategies.
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REFORMING personal property tax
THE PLAN NEW GF REVENUE STATE USE TAX TRANSFER TO LOCALS EXPIRED • LOCALUSE TAX GENERAL FUND • STATE USE TAX • CREDITS
STATE + USE TAX LOCAL cannot exceed 6% under the Constitution
WHAT IS USE TAX? Use tax is sales tax on: - out of state purchases - telecom • lodging • - 4¢ general fund • 2¢ school aid fund
REIMBURSEMENT 100% 80% POLICE FIRE AMBULANCE JAILS K-12/ISDOPERATING AND DEBT LOSS LOST TIF CAPTURE EVERYTHING ELSE
REIMBURSEMENT FY 2014 AND 2015 LOCAL TAXING UNIT LOCAL SCHOOL DISTRICT ISD FY 2016 AND BEYOND Calculate essential services loss – up to 100% of that amount made up through locally levied Essential Services Assessment (ESA) Basic operating loss - 100% of that amount made up through SAF The legislature shall appropriate an amount to cover all debt loss Calculate debt/operating loss – 100% of that amount made up through use tax distribution Calculate debt loss and hold harmless/out-of-formula operating loss – 100% of that amount made up through use tax distribution Calculate remaining loss amount, not including loss eligible for reimbursement through ESA – 80% of that amount made up through use tax distribution Calculate sinking fund/recreational mill loss – 80% of that amount made up through use tax distribution
UNREIMBURSED EXEMPTIONS VS. TOTAL LOCAL REVENUEFY 2023 (EST) Amount Not Reimbursed $64.9 M Total PPT Cut $576.6 M 0.137% of General Revenue Total Reimbursement $511.7 M Total General Revenue $47.4 B
PROJECTED GROWTH OF EXEMPT PP REVENUE VS. USE TAX REVENUE 2023-2033 Projected growth in revenue from exempt personal property, assuming no exemption: $30.3 M $600 Projected growth in Use Tax revenue: $582 M $400 $200 $0 2023 2033
REFORMING personal property tax