Senate committee weighs homestead exemption options in H.454 after models show $45 million gap

Members of a Senate committee reviewed modeling of the homestead (house-site) exemption included in House bill H.454, focusing on who would benefit, how much the change would cost and options to limit that cost. Julia Richter, Joint Fiscal Office, told the committee that the House version of the exemption “is estimated to cost approximately 45,000,000 more than income sensitivity under current law.”

Why it matters: the homestead/house-site exemption changes how a portion of the principal dwelling’s value is excluded from the property tax base. Committee members said the proposal as drafted would shift some costs onto taxpayers who do not receive exemptions and could increase statewide property-tax rates unless offsets or caps are adopted.

The modeling and the proposals: Richter presented the Joint Fiscal Office’s slide deck and underlying data, explaining the administration’s earlier tiered proposal and the House’s H.454 alternative. Under the administration’s original framework, lower-income households would receive larger percentage exemptions (for…