Revenue & Taxation- House

Representative fights a House bill ten thirty two before we get started. I just wanna make a comment about how things are going to run in this committee and it's going to be very similar to the way that my predecessor representative Jett ran this committee and I I have big shoes to fill because I think you did an excellent job so we're likely not going to hear bills if they do not have a fiscal impact statement so all you'll know that in and and if your colleagues in the House have questions if you will help me relay that message even those that do have a fiscal impact statement we may hear and we may not take a vote initially and move those down the line or or way down the line in the committee process as we get through some of the bigger items that that the leadership is working on with the governor's office so that at the end of the day we know how much we have available to do some of the things we want to do NO one of the properties is going to be income tax cuts so every time we have a bill in here that has an exemption or cut or a. Anything like that that's going to affect what we're able to do toward the end of session so if you would keep that mind all those bills are are valid and worthwhile but not at the end of the day there's only so much we can do and I do believe that the Senate revenue in taxes following a similar procedure so with that being said you guys help me keep on track and will recognize representative fight to present house bill ten thirty two. Okay thank you. Morning your morning. it Mister I have with me today Russell hill from Washington County he's the assessor in Washington County please introduce to. Thank you for hearing us today to speak on behalf of the Arkansas sisters Association. Did and just from Washington County with at our last council wide reappraisal we saw for the average property owner in Arkansas saw a forty nine percent increase in our property values it's no secret that sat real estate market has just been wildfire across the entire state and so we are in full support for this increasing the homestead credit from three seventy five to whatever it can bear with that half cent sales tax across the state this will help multiple homes of every homeowner across the state would appreciate this Help in this time where they're seeing their property values hit hit skyrocketing which means they're paying higher property taxes so any tax relief this is something that we support to help the property owners in Arkansas. Okay Mr what this bill does it raises from three seventy five to four twenty five the home state credit. there seventeen counties that went through reappraisal here and they were all double digit increases in the property. And of course under Amendment seventy nine they can only go up five percent a year but this will help offset it. on this bill today I do not have will go into effect the year twenty four and I've got to amend the bill to reflect that and also I have a Senate sponsored that only to to add at some point. but it's very simple we have the money do you happen at a I think will of be willing to come to the table to discuss the impact statement here at the point you would like to have a vote here but I'd be willing to answer any questions anybody might have at this time. Thank you represented by members are there any questions. Regenerate you're recognized. Thank you Mr chair Represented by the I know. I believe it was twenty nineteen was the last time the homestead property tax credit was was increased do you know do we or do we know maybe just a question for deaf and I. How much revenue that half cent sales tax was generating at the time versus how much is generating today because I know sales tax collections have gone up considerably since that time. Do we know that number. I I would be afraid to give you a number I I it seems like it was around two hundred thirty million a year something like that at that time I would ask the United do you happen to you to clarify that but okay I'll ask them okay what one additional thing this may be a little bit tangentially related but I know that that in the past there have been efforts to take money out of the property tax relief trust fund some might say rated and use it for the on things not related to property tax relief have you given any consideration to adding in protection so that that doesn't happen in the future. that's coming in another bill okay that sounds like a good good bill. Thank you. Thank you representative members any other questions of the representative fight. I think we have some people here that would like to speak on this We have we we do have someone signed up to speak for the bill I believe that's Mr hill and I think you just vote for the bill all right is there anyone else would like to speak for the bill. Anyone in the audience and speak against the bill. It's chair I think they're all for the audience did appear so yeah. Represented by did you want to bring in the anyone from the FNA up to give a little more about how this works how much it costs and those kind of things please get someone from the FNA. Hillman good morning of members of the committee Mister chair Paul hearing DFA. And Robert correct the effect. So I did a issued a fiscal impact statement for house bill ten thirty two the homestead property tax credit is is funded by a half cent sales tax that the General Assembly enacted in in a prior session though that have state sales tax is deposited into the property tax relief trust fund and as the counties are provide the credit to the owners of the homestead the the fund then reimburses the counties but over time there is a a balance that builds up in the trust fund data is available to the General Assembly for the purposes that it decides to use but certainly there is the ability to raise the amount of the homestead credit to accommodate for increases in the collections of the tax. Our members you have any any questions for any of the German from Devon Act. None at all regenerates thank you Mr chairman I guess my question would be the same one I asked earlier is it possible to know how much money the the half cent sales tax was bringing in at the last time that credit was increased versus how much is bringing in now. Six so we have a representative we do have a a spreadsheet that has the calendar year collections of the half cent sales tax would be happy to get copies made or just distribute them to the committee that I want but if you have a particular year that to we do have it by by year the amount of the collections and less the reimbursements to the counties to to fund the tax credit so that would be if you could send that spreadsheet that would be great I'm just trying to learn absolutely thank you. Thank representative representative Fortney recognized thank you Mr chairman up Paul how much what is the balance in that fund right now roughly. Actually the balance is extremely low what happens whatever the balance was on December thirty first that is immediately transmitted to the county's it was a hundred and twenty million dollars approximate was transmitted to the counties on a January sixth has the money comes in that money will be sent to the counties until the the entire certifications paid off which we expect will be sometime in April. Follow. So that account fluctuates it builds up once the counties are paid off the moneys accumulators round thirty million dollars per month they currently have those once the counties are paid off it just builds up in that fund whatever's in the fund in the first payment in January that's immediately transmitted to the county so that no no balances kept until the the counties are paid off so it doesn't ever go in a shortfall that's correct as long as they have since sales taxes and of which it is currently thank you. Thank you president members I failed to mention something at organizational meeting and at the beginning of this meeting don't ask for a follow up that's not gonna be necessary here my opinion on that is this is the only place we have an opportunity to really dig in and ask questions on all these bills so if you're have a line of questioning just go ahead and keep going and if you go too long I promise I'll let you know right. Representative gene you're recognized. Thank you Mr chairman of. Mr Gehring so that the the impact for twenty twenty four thirty four million. What will the what will the total be for the homestead exemption that year if the increase is thirty four what is the total amount of dollars for the the The tax credit for twenty twenty four. Mister read. Currently the homes exemptions around two hundred sixty seven million so at thirty four to that thirty four that right around three hundred okay thank you. Thank you originate the representative let you're recognized. So that accounts splashed at the end of the year the county is this is that just a bonus to the counties. Now that the county's only get what they're certification is the the rest remains in that account the way the current laws written any any excess funds are needed are to be swept in the catastrophic reserve fund at the end of the year. So they don't stay there not currently no. Thank you representative representative will you're recognized. Thank you Mr chairman I have procedural question before we take a vote or do pass order we're going to okay go ahead okay my question is today in this the bills that we have and I'm not by any means speaking against this bill but up I just wanna be sure that committee understands or understands we were just in these bills that are before us today is two hundred and seventeen million dollars and exemptions and when you had in this thirty four the thirty four million credit for thirty five million credit jobs two hundred and fifty two million. And then we're looking at surplus we're looking at inflation we're looking at session we're looking at income tax elimination so at what point do we say well we're going to hold this until we get a better clarification or understanding religion to we're we head of me I don't think we're out of the economic downfall that were in the in the imagination yes Sir and was on and apple of several more of this issue today additional layoffs so I mean we're we're we have the I'm I'm going to if you hold that thought I would come back to that after we get through with questions on this particular one but I have an answer that I think will help you with that okay thank you thank you didn't representative Mike Linden thank you and I say that right you did okay consideration thank you chairman quick question just a follow up and representative Lynch is question you said the excess moves to the catastrophic relief fund can you tell me what how much thereof that move last year after everybody the counties were all paid yes a hundred and fifty million dollars was transferred in December of the way the law reads it has to be has to occur before December thirty first the and it hasn't happened additionally but because of the excess revenues or that have some sales tax that's bringing in excess revenues of. We did do that we did sweet fifty million dollars out last year as well okay thank you. Thank you representative representative rate you're recognized Paul or someone. Robert. I wanna make sure I understand. how all of this money comes in and where it goes to the the money is brought into the half cent sales tax I am I correct in understanding it goes into it a segregated account or fund what is the name of that fund. The property tax relief fund okay so this is not considered general revenue. Well it. When it wouldn't well no I think it be it goes into that fund specifically for this purpose unless there's an access got to okay thank you. Thank you representative right you're recognized thank you Mr chairman folks SQ this want you pay out of for two thousand twenty four which is far two thousand twenty three taxes with that's what we're working on right now. Well the taxes for this year. Rail relate back to the four twenty five for last year or will it be starting in two thousand twenty five. So it's a twenty four I'm sorry twenty four one twenty fourth what it will be right yes it starts for this year is are for this assessment years my understanding but then those are for taxes that are collected and paid in two thousand twenty four so that we're really that for twenty five wouldn't show up until two thousand twenty. Four that's correct right that's correct okay well okay final Sir okay once you once you figure that out are we going to have a balance. After we we do that the first year you know there should be a balance so we suspect that will have the counties paid up in in April so from may through December that thirty million dollars a month will just build up to me for the payments for next year so you think we're gonna be okay on the yes yes okay thank you thank you Mr thank you senator Ron. All right members any other questions for DF in a on this topic. All right seeing none thank you guys for that thank you members as I mentioned earlier this bill and I believe representative fight would would agree with me on this is still have some things that need to be done to it and there still some negotiations or really discussions is the correct term with the governor's office on on this so today we're just gonna hear the bill we're not gonna be voting on the bill so representative fi do you want to close for your bill. I think it's pretty as a yes I think it's pretty simple we Pat seventeen counties been reappraised the others will be being reappraised in your you're going to see increases like we've seen across the state are ready and this was this fun is called the property tax relief fund and so as much of this money if we can get back to the people I feel like we're doing our jobs will be to that. All right thank you represented by appreciate that again we're not gonna be voting on this bill today so we just want to hear it Kind of keep it keep it in your mind and if you have any questions or represented by you can see my you'll see this bill again pretty pretty soon that's the only bill that we're gonna be hearing today but I wanted to go back to representative wooden's comments and I address some of that a little bit earlier and he's exactly right this committees up to well over two hundred million dollars in Tax related items so if income tax cuts or something we want to do which will come later in session then we've got to be mindful of that on all of these bills that have exemptions this one is probably a little bit different because it doesn't directly affect your revenue it's a special trust fund for working for one purpose I think you'll see another bill from representative fight likely that will address this the automatic sweep that happens now I don't want to overstep my my bounds here but I believe that something similar to what he's gonna be working on so again if the bill comes into this committee it needs a fiscal impact before we really need to hear it and then we will still hear these bills with fiscal impact statements we may not vote on these bills if there is no fiscal impact to general revenue or no revenue impact at all we're going to hear and vote on those bills as we roll on through session will probably at some point have to get together on what our priorities are as far as what we want to get out of this committee and and certainly that's something we're going to do as a as a committing as a team so members you have any questions on that. No. Kochhar Beatty one adding to that. You got it covered okay all right. Any other business. Thanks any none thank you for your time members we are Journal.