House kills tax exemption boost for some homeowners

March 6, 2009

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JACKSON -- The House Ways and Means Committee on Tuesday killed a Senate-passed bill to increase from $75,000 to $100,000 the tax exemption for elderly and handicapped homeowners. 

 


House leaders said this would cause counties, cities and school districts to raise property taxes on younger residents and car owners to offset revenues lost from raising the homestead exemption. 

 


"If you do this, there could be some shifting of the burden to somewhere else that may do more harm than good," said House Democratic Leader Tyrone Ellis, of Starkville, who sits on the Ways and Means Committee. 

 


The tax-relief bill was one of Republican Lt. Gov. Phil Bryant''s top legislative priorities. The Senate he presides over passed the bill in January as its first measure of the 2009 legislative session. 

 


Under current law, elderly or disabled homeowners in houses valued at less than $75,000 don''t have to pay property taxes on their dwellings. Senate Bill 2300 would''ve raised that exemption to $100,000 for those people over age 65 or who are disabled. It would''ve applied to counties that have completed reappraisal, which is done every four years. 

 


In recent years, as home values increased, more seniors have been hit with property tax bills unlike before.  

 


"This would have given them some relief, but that''s not going to occur," said Rep. Gary Chism, R-Columbus, who expressed disappointment about the bill''s demise. 

 


County supervisors opposed the bill because it would result in lost revenues and pressure them to raise property taxes. For example, Lowndes County could lose about $480,000, according to information provided to the House Ways and Means Committee by the Mississippi Association of Supervisors. 

 


There would be a "double-whammy" of revenue losses as more elderly people in homes valued over $75,000 get sheltered from taxes while counties'' overall property tax bases decline due to homes now losing market value, said Derrick Surrette, MAS'' executive director. 

 


"How do you get around not losing those revenues?" he said.  

 


With homestead tax exemption increased to $100,000, counties would have to increase property taxes on people under age 65 and car taxes on people young and old, Surrette said. For example, home taxes in Madison County would go up an average $153 for homeowners under age 65 and car taxes would rise by $92 for those under and over 65.