County officials tell committee lost state transfers and limited taxes force heavier property-tax burdens
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Summary
Jay Hall told a legislative committee counties rely heavily on property taxes after the state consolidated former local revenue sources; he urged options including restoring certain use taxes, raising motor-vehicle shares and allowing local earning- or sales-tax options to diversify local revenues.
Jay Hall, speaking for the counties association, told a legislative committee that counties depend “almost entirely on property tax” and have seen predecessor local revenue streams shrink or disappear, shifting more costs onto property owners.
Hall said state actions beginning in the late 1970s — when cigarette and liquor taxes were centralized at the state level — produced replacement formulas such as LAVTR and CCRS that once redistributed money back to cities and counties. “When those funds stopped being distributed to the locals,” Hall said, “the state's still collecting that money, but it's just not being redistributed back to the local governments.”
Why it matters: Counties, Hall said, effectively have “one and a half legs” of the traditional three-legged revenue stool (property, sales and income taxes). With no local income tax and some use taxes removed or exempted, local governments see property-tax spikes whenever a revenue source is lost, he said.
Hall and committee members discussed possible remedies. Hall pointed to motor-vehicle fee revenue and recent Senate Transportation discussion of Senate Bill 404 as a way to shift some motor-vehicle costs away from property taxes. He also urged re-evaluating the county share of the gas tax, which he said has not changed substantially in about 15 years.
On local-option taxes, Hall referenced House Bill 2385, an earnings-tax proposal that would offer another local revenue option. “I don't know if that works for every single county,” he said, “but it's something that I think can be discussed.”
Committee members pressed on data and cost breakdowns. Hall said some handout figures reflect equipment and material costs but not personnel and benefits, complicating direct comparisons between counties. He also warned that short-term state funding fixes have sometimes been reduced later, undermining long-term local planning.
The committee did not vote on any measures during the hearing; members said they will review materials submitted by the conferees and consider follow-up on valuation rules and specific tax proposals.