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County assessor warns proposed ad valorem changes, larger homestead exemption could cut local revenues
Summary
County Assessor Mike Wilson told BET members on Aug. 12 that proposals under study at the state level to alter ad valorem property taxes and raise the homestead exemption could cut county general‑fund revenue and strain local bonding capacity.
County Assessor Mike Wilson briefed BET members on Aug. 12 about interim legislative proposals discussed at a recent assessors’ conference that could change how ad valorem property taxes and the homestead exemption work statewide. He warned that some proposals under study — including proposals to raise the homestead exemption or otherwise reduce ad valorem collections — could substantially lower county revenue and affect debt capacity.
"You see it in the states of Florida. You're seeing it down in the state of Texas," Wilson said, describing wider interest in changing property tax rules. He told the board that a measure presented in another county would increase the homestead exemption from its traditional $1,000 assessed‑value exemption (in place since before statehood) to roughly four times that amount; Wilson said an increase to four times the current exemption could remove about $3.5 million from the county general fund if adopted as proposed.
Wilson said the homestead exemption currently saves taxpayers roughly $100 to $130 a year on average and that the county’s existing homestead exemption removes just over $1 million from the county general fund in foregone ad valorem revenue. He also estimated that state reimbursement programs tied to certain exemptions have not been paid to the county since about 2002 and that unpaid reimbursement could total roughly $600,000–$700,000 annually, per his remarks.
Board members and staff discussed how those changes could affect schools and other taxing entities. Wilson said changes that lower local assessed value growth would reduce the local base available for bonding and could force greater reliance on state aid formulas to backfill school funding. "We may be trying to help people, but we may end up hurting the ones we're trying to help," he said.
Wilson urged BET members to relay the information to their elected officials and noted the assessors have been participating in an interim study group at the state capital. He recommended that county elected officials discuss the potential changes with the county budget board and other stakeholders so the county can prepare impact analyses and possible mitigations.
No formal action was taken; the board discussed keeping the item on the watch list and asked staff to keep members updated as the interim study proceeds.
