News & Issues

Fate of Bills With Property Tax Implications on Crossover Day

Apr 12, 2021 | Property Tax, Schools, Taxes

There were several bills designed to relieve property taxes. But the only ones that really matter are HB1 and HB2, the budget bills. The House budget adds new business tax cuts without restoring many forms of revenue sharing with municipalities as required by law. It also opened the door to using taxpayer money to fund private and religious school education.

Efforts At Property Tax Relief

The House is good at giving with one hand and taking away with the other. It moved $100 million from general revenues to reduce the education state property tax in 2023. It should be noted that when the state stopped sharing revenues with municipalities, it was general revenues that it stopped sharing. Now it is using general revenue money to bolster its education adequacy funds.

The House also added almost $30 million more for county nursing homes to prevent a significant county property tax increase.

However, it failed to make adjustments for the decrease in overall student enrollment because of Covid-19. Unless restored by the Senate, this failure would represent nearly a $90 million decrease in state aid to schools. It also opened the way for using money set aside for public education to fund vouchers or scholarships that can be used to pay for enrollment in private or religious schools.

Bottom Line

In the end, the House budget decreases nearly $41 million in aid to municipalities from the previous budget. This decrease in funding will need to be made up by property taxpayers. Just one of the reasons no Democrat voted for the budget bills.

What Next

Now the budget passes over to the Senate. The Senate will have the advantage of data that shows increases in revenues in March and April. So it will have more money to spend. The Senate has held back some bills that could stabilize or decrease the property taxes. So hope still remains for a less onerous budget. For one, the Senate has signaled it’s intent to include funding based on pre-Covid general student enrollment. However, any changes made by the Senate will have to be approved by the House..

It’s important that we continue to pressure the Senate to keep the property taxpayer in mind as it crafts its budget.