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Senate amendment would temporarily raise renter tax credit rate and cap; cost estimated at about $4 million
Summary
A one-year Senate amendment would raise the renter tax credit from 10% to 12.5% of county fair-market rent and increase the statutory cap from $2,500 to $3,250 for 2026 claims; the fiscal office estimated the change would cost about $4 million and be covered by a general-fund transfer to the education fund.
The Senate amendment under discussion would temporarily increase the state's renter tax credit calculation from 10% to 12.5% of the county fair-market rent used for the claimant's family size, and raise the statutory per-claim cap from $2,500 to $3,250 for 2026 claims, a presenter told the Senate Finance working group.
"It's just a temporary expansion," the presenter said, describing the change as a straightforward mathematical adjustment. The presenter added, "It would cost about $4,000,000, which is coming out of that transfer from the general fund to the education fund." The presenter also said the calculation relies on HUD fair-market rent tables to set county rent amounts.
Eligibility for the credit remains income-based, the presenter said: claimants must be at or below 65% of area median income (AMI), with the credit phased in and out by income and adjusted for family size. The presenter estimated roughly 17,000 recipients statewide under current rules, out of an estimated 75,000 renting households discussed during the session.
Committee members pressed for clarification on why the statutory cap increase does not match the percentage increase in the credit calculation. A committee member noted that raising the credit rate from 10% to 12.5% is a 25% increase in the calculation but the cap change from $2,500 to $3,250 is a different percentage; the presenter acknowledged they did not have an immediate explanation for the mismatch.
Why it matters: backers say the temporary expansion would increase relief for lower-income renters for one year; critics and some members asked about the cost and whether the unchanged mechanics of the cap align with the percentage increase. The presenter identified the general fund transfer to the education fund as the intended source of the $4 million cost.
The working group did not record a vote on the amendment in the transcript. Staff offered to provide additional data and spreadsheets to members for further review.
