Senate Bill 4 - Property Tax Relief, Raising the Homestead Exemption

As proposed, SB 4 seeks to provide property tax relief to homeowners by raising the homestead exemption from $100,000 to $140,000, costing roughly $3 billion out of the $24 billion State surplus over the biennium. Included in the bill is a provision that the state will make up any funding deficit a school district might incur as a result of this exemption increase, including Interest & Sinking (I&S). The relief provided by raising the homestead exemption tends to only provide temporary relief (since the exemption loses its value over time as property appraisals continue to rise and local spending increases) and shifts the tax burden to other taxpayers. Nonetheless, TFR supports SB 4 to provide some relief to homeowners. SB 4 should be amended, however, to expand relief through rate compression which provides longer term relief to all property owners, and provide a majority of the State’s surplus back to taxpayers.