LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 30, 2001
TO: Honorable Paul Sadler, Chair, House Committee on Public
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HJR103 by Hamric (Proposing a constitutional amendment
to prohibit an increase in the total amount of school
district ad valorem taxes that may be imposed on the
residence homestead of a disabled person.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HJR103, As Introduced: positive impact of $0 through the biennium *
* ending August 31, 2003. *
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The resolution proposes an amendment to Article VIII, Section 1-b(d) of
the Texas Constitution to extend the current school property tax
limitation ("tax freeze") for residence homesteads to disabled persons.
The proposed constitutional amendment would be submitted to voters at an
election to be held November 6, 2001.
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 0 *
* 2004 0 *
* 2005 (3,382,500) *
* 2006 (4,114,000) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Probable Revenue Gain/(Loss) *
* Year General Revenue Fund from School Districts *
* 0001 *
* 2002 $0 $0 *
* 2003 0 0 *
* 2004 0 (3,382,500) *
* 2005 (3,382,500) (731,500) *
* 2006 (4,114,000) (876,500) *
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Fiscal Analysis
For the 2000 tax year, school districts reported $17.7 billion in
property value loss attributable to the current 65-and-over school
property tax limitation. Applying a $1.50 tax rate, this value loss
translates into a levy loss of $265,500,000. This levy loss benefits
1,069,000 qualified 65-and-over homeowners, resulting in an average tax
limitation benefit of $248. School district reports indicate 102,000
disabled persons qualified for the $10,000 homestead exemption
(approximately 10 percent of the total number of qualified 65-and-over
homeowners).
Methodology
Based on an assumption that the average 65-and-over homestead owner
receives approximately 10 years benefit from the school property tax
limitation, qualified disabled persons would receive an average benefit
of $27.50 in the first year of implementation, increasing at a 10 percent
rate over the next 10 years. It was also assumed that the number of
qualified disabled persons would increase by approximately 10 percent per
year over the projection period. Because of the younger age of most
disabled persons who would qualify under this provision and their
increasing number, levy losses would continue to increase by some
undetermined amount beyond 2013.
Section 403.302 of the Government Code requires the Comptroller to
conduct a property value study to determine the total taxable value for
each school district. Total taxable value is an element in the state's
school funding formula. The state could reimburse school districts for
their total levy losses, including losses for this exemption, after a
one-year lag.
Local Government Impact
No fiscal implication to units of local government, other than school
districts, is anticipated.
Source Agencies: 307 Secretary of State, 304 Comptroller of Public
Accounts
LBB Staff: JK, CT, BR