The proposed bill modifies the statewide education property tax system by establishing a new Uniform Statewide Education Property Tax (USWEPT) rate, which will be set to generate $378 million annually starting in fiscal year 2028, an increase from the previous target of $363 million. The bill mandates that all USWEPT revenues be collected and remitted to the Department of Revenue Administration (DRA) for deposit into the education trust fund, which will exclusively fund education grants and property tax relief for low- and moderate-income homeowners. Additionally, the bill includes provisions for annual increases of 2% to the tax amount and revises the eligibility criteria for the property tax relief program, including raising household income limits and adjusting the property value factor for rebate calculations.

Moreover, the legislation establishes a committee to study the effectiveness of the property tax relief program, which will explore extending relief to tenants and the relationship between household income and property taxation. The bill also removes the SWEPT as a variable in the adequacy education grant formula, which will impact how education grants are calculated and distributed. This change is expected to decrease state expenditures and local district revenue by approximately $31 million in FY 2028, with a projected annual growth of 2%. Overall, the bill aims to enhance the funding structure for education while providing necessary support to eligible homeowners, ensuring a robust and effective property tax relief framework.

Statutes affected:
Introduced: 76:3, 76:8, 76:11-a, 198:39, 198:57
HB1787 text: 76:3, 76:8, 76:11-a, 198:39, 198:57