Senate Appropriations advances yield bill that nearly buys down property tax rates and expands renter credit for one year

The Senate Appropriations Committee advanced H949 on April 23, adopting a finance amendment that would nearly fully buy down a planned transfer to the education fund and temporarily expand the renter credit.

Legislative counsel John Gray told the committee the amendment reduces the transfer from the general fund to $100.9 million (down from $104.9 million in earlier drafts) and uses the money to lower property tax yields. Gray provided the revised yield figures: a property yield of 9,395, an income yield of 12,942 and a non‑homestead rate of 1.648. He described technical fixes in the bill intended to keep the statewide adjustment "mathematically neutral," including a statutory correction to how the property tax credit interacts with the statewide adjustment so the adjustment does not change tax liability.

Why it matters: committee members emphasized the change would lower property tax bills on average, but cautioned averages mask local variation. Julie Rank of the Joint Fiscal Office told the panel the House yield construct would increase average property tax bills by about 6.7%, while the Senate amendment discussed in committee is estimated to increase average bills by about 3.8%.

What the amendment does: the finance amendment incorporates previously passed S220 language to change how excess spending is calculated for school districts. It removes the time limit that had restricted the exclusion for voter‑approved school construction bonds (so any voter‑approved bond would be excluded from excess‑spending calculations) and lowers the excess‑spending threshold to 112%, with an appeals process to the Secretary of Education for districts that can show a valid reason (for example, emergency capital expenditures or substantial pupil loss). Gray said those provisions are intended to reduce the disincentive for districts to pursue voter‑approved bonds.

The amendment also temporarily expands the renter credit for one year: it raises the statutory cap on the credit from $2,500 to $3,250 for that year and changes the calculation for the highest‑eligible tier from 10% to 12.5% of fair market rent. The change is limited to one fiscal year; sections in the amendment return the cap and calculation to current law the following year.

Other technical changes Gray outlined include a correction to prevent a miscalculation of the property tax credit tied to the statewide adjustment, a refund provision expected to return about $150,000 to the education fund for prior overpayments tied to a software issue, and a codification of the FY27 census block grant base (a uniform base amount of 2350 with a three‑year rolling inflation factor).

Committee debate and vote: members described H949 as a "must‑pass" bill that would likely go to conference. Several senators expressed concern about the sustainability of using general‑fund transfers to lower property taxes year after year and urged structural cost controls; proponents argued the amendment reduces the risk of double‑digit increases in many districts. The committee moved H949 with explanations and recorded affirmative votes. The meeting paused for a short recess after the vote.

Next steps: H949 will proceed through the legislative process and could be subject to conference negotiations between House and Senate sponsors. The finance amendment includes several effective dates tied to the FY27 budget and a one‑year renter credit expansion that reverts the following year.