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SPONSOR: |
Fidel |
DATE TYPED: |
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HB |
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SHORT TITLE: |
Tax Exemption for Veterans, CA |
SJR |
19 |
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ANALYST: |
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REVENUE
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
FY03 |
FY04 |
|
|
|
|
4,200.0 |
|
|
Veterans |
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(4,200.0) |
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Non-Veterans |
|
|
|
|
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(Parenthesis ( ) Indicate Revenue Decreases)
Relates to:
HB-71, Expand Disabled Veteran Exemption
HB-85, Expand Disabled Vet Exemption
SB 119, Increase Veteran’s Tax
Exemption
SB 188, Implement Increased Veteran Tax Exemption
Responses
Received From
SUMMARY
Synopsis
of Bill
Senate Joint Resolution 19 is an expression of the Senate to amend the state constitution, granting total property tax exemption for veterans or surviving spouse’s principal place of residence.
Significant
Issues
Senate
Joint Resolution 1, enacted in the 2001 legislative session, allowed voters to
consider an amendment to the New Mexico Constitution increasing the current
$2,000 veteran exemption to $2,500 in tax year 2003, $3,000 in 2004, $3,500 in
2005 and $4,000 in 2006, where it would remain. Voters approved it.
FISCAL IMPLICATIONS
TRD notes that allowing all veterans to claim the exemption would
expand the number of claimants from 80,000 to approximately 124,000, because,
according to census figures, roughly 177,000 veterans currently live in
The relief provided to veterans would be largely offset by rate
increases for all residential taxpayers due to the loss in base. This would
occur as the yield control mechanism increased operating rates due to loss in
base referred to as "valuation maintenance", and as debt rates
increased to offset base reductions.
Since the base reduction
under this proposal would total $176 million or about 1 percent of the current
$17.1 billion residential portion of the base, rates would, on average,
increase by roughly 1 percent, and
net relief provided to veterans would total $4.4 million, or 99 percent of $4.5
million. There are a few cases where rates would not be able to adjust, but
they would be minor because 1) the base grows at about 2 to 3 percent annually,
and 2) the exemption would increase gradually over a period of five years.
Hence revenue losses to property tax recipients -- school districts, counties
and municipalities -- would be insignificant.
Finally, it should be
noted that, according to the Veterans Service Commission, approximately 8,000
disabled veterans will probably qualify for the total property tax exemption
likely to emerge from this year’s legislative session due to the recently
approved constitutional amendment. As a result, effects of the proposed measure
would be slightly less because some portion of the disabled veterans would
qualify for the partial exemption that is the subject of the proposed
legislation.
SN/njw