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HF 773 Talking Points

Property Tax Transparency Trigger

 

What the bill does:

Starting in budget year 2021, if a city or county wishes to increase property tax revenue by more than two percent above the prior year, some extra transparency measures are triggered, specifically to:

  • Publish a notice of intent and date of public hearing;
  • Hold a public hearing to explain the amount and purposes for which the additional funds will be used; and
  • Vote by elected officials on a resolution containing that information.

Property tax revenue generated by new construction is not subject to these requirements.

An increase in property tax above two percent could be contested through a petition and referendum, but the bar is set so high it would be unlikely to ever be used.

Basically, HF 773 is intended to foster conscious local budget decision-making about the property tax revenue actually needed, rather than defaulting to whatever increase is generated by a constant rate applied to an increase in assessed value.

Property tax collections have grown much faster than population, inflation, household income, and state revenue.  One of the key reasons is the current property tax system makes it too easy for local governments to automatically capture increases generated by constant rates on rising valuation.  HF 773 will help bend the curve on property tax growth while allowing all critical needs to be met.

 

What the bill doesn’t do:

The bill does NOT preclude local government from raising the revenue it needs; it simply puts in place some additional disclosure requirements when the trigger is exceeded.   Any disaster scenarios are meaningless and even spurious because the bill does not prevent any increase; it simply requires disclosure and explanation if the threshold is exceeded.

 

Tax Transparency Talking Points

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