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Senate Finance weighs using $52.45M reserve to buy down property taxes or hold for FY28
Summary
The committee reviewed the yield bill options: the House proposal splits a one‑time general fund transfer to lower property tax bills in FY27 and reserves $52.45M for FY28; members debated a full buy‑down this year, targeted relief, or reserving funds for next year.
The Senate Finance Committee examined competing approaches in the yield bill for distributing a one‑time general fund transfer and education fund reserves intended to affect FY27 property tax yields.
Legislative counsel John Gray told the panel the draft directs the commissioner to use half of a one‑time $104.9 million general fund transfer to lower FY27 property tax yields and to reserve $52.45 million for FY28. He said the bill instructs assumptions for the commissioner’s yield calculations and that the reserved amount is intended to offset future rate increases.
Several members favored a full buy‑down this year. One member said, "What I do support is using that full 52,450,000 to buy down the tax rate this year," arguing it would give immediate relief to taxpayers. Fiscal staff (Julie of the fiscal office) presented multiple outlook columns showing how the size and timing of transfers — and whether the house construct’s combination of a general fund transfer and an education fund surplus is used — change the committee’s estimated average uniform bill change for FY27.
Options on the table included: using only education fund surplus for a buy‑down; splitting the general fund transfer across FY27 and FY28 (the house approach); or applying a full one‑time buy‑down in FY27 and accepting the need to manage out‑year impacts. Members discussed implications for the transportation fund, purchase‑and‑use tax allocations, and whether shifting $10 million annually between funds increases future cliffs in the education fund.
Why it matters: choices in this bill determine whether taxpayers see a smaller, immediate uniform increase in property tax bills this year or whether some relief is reserved to stabilize rates in FY28. Fiscal staff noted the house numbers produced an estimated average uniform bill change of about 6.7% under updated budget assumptions, while other scenarios ranged from roughly 3.6% (if more one‑time money were used) to about 9.9% (if no general fund transfer is used and only the education surplus is available).
Next step: committee members asked for additional modeling and agreed to continue discussions, mindful of the interaction between the yield bill, the miscellaneous tax bill and transportation funding decisions. No vote was taken.
