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El Dorado presenter warns SB 488’s retail surcharge could shift control and add uncertainty
Summary
The presenter said SB 488 would end property taxes by 2028 and replace them with a state-collected retail surcharge to be redistributed to local governments, warning the change could create distribution uncertainty and reduce local accountability.
The presenter described Senate Bill 488 and the city’s reservations about it. "Senate Bill 488 would effectively end property taxes by the year 2028," the presenter said, and added that the bill "provides for a replacement of property taxes by creating a retail surcharge" that the state would collect and distribute by formula.
The presenter’s concerns focused on how the surcharge would be collected and allocated and on the risk that state control of the revenue stream could reduce local predictability for budgeting and bond financing. He cited the local ad valorem tax reduction (LAVTR) history as an example where state funding promises were later reduced or removed.
