LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 525 HLS 20RS 407
Bill Text Version: ENGROSSED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: May 12, 2020 2:44 PM Author: HILFERTY
Dept./Agy.: La Tax Commission / Local Governments
Subject: Homestead Exemption Special Assessment Level Analyst: Greg Albrecht
TAX/AD VALOREM TAX EG SEE FISC NOTE LF RV See Note Page 1 of 1
(Constitutional Amendment) Removes the income limitation for qualifying for the special assessment level
Current constitution provides a special assessment level (frozen assessed value) to homesteads owned by people 65-years
old or older, or have at least a 50% military service-connected disability rating, or armed forces members killed or missing in
action or were prisoners of war for more than 90-days, or are totally disabled. Special assessment is only available to those
with federal adjusted gross income less than an annual amount (adjusted for inflation each year). The current threshold is
$77,030.
Proposed constitutional amendment rebases the income limitation for receiving the special assessment $100,000, and
continues the current law inflation adjusted beginning with 2021.
To be submitted to the electors at the statewide election to be held on November 3, 2020.
EXPENDITURES 2020-21 2021-22 2022-23 2023-24 2024-25 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0 $0 $0
REVENUES 2020-21 2021-22 2022-23 2023-24 2024-25 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 SEE BELOW SEE BELOW SEE BELOW SEE BELOW $0
Annual Total $0 $0
EXPENDITURE EXPLANATION
There is no anticipated direct material effect on governmental expenditures as a result of this measure.
REVENUE EXPLANATION
The Louisiana Tax Commission 2019 Annual Report indicates that a total of 180,803 special assessments are currently in
place. Nearly 90% of these assessments (161,929) apply to persons age-65 or older, with just over 10% applied to disabled
categories or persons. Increasing the income limitation for availability of the special assessment can only work to increase
the number of such assessments, and consequently reduce the future growth of the residential property tax base for local
governments. The magnitude of such an effect is uncertain, and millage adjustments are likely to shift the ad valorem tax
burden as growth in this portion of the tax base is constrained.
Current U.S. Census data implies that there are almost 716,000 residents of the state age 65 or older. U.S. Labor Dept.
consumer expenditure survey data for the South indicates that over 80% of this age group are homeowners. Even though
one-third of homesteads in the state are 100% homestead exempt and some material share of these residents are likely to
share a homestead, this has been a declining share as home values have risen over time. Thus, population count data
suggests that it is possible that the number of special assessments could increase significantly.
However, the income limitation is already fairly high at over $77,000, and U.S. Census data for the U.S. estimates that only
about 28% of the age-65 or older population has household income over $75,000. The median income of the age 65-74
cohort is only $52,465, and for the 75 or older cohort only $34,925. Even the average income of these age cohorts is less
than the current special assessment income threshold at $76,669 and $54,416, respectively (average income figures tend to
be less representative). Thus, considering that incomes of state residents tend to be lower than for the U.S. as a whole, as
well as the income distribution of the affected population in the context of the current income threshold, it seems possible
that most age-65 or older homeowners in the state are already eligible for and/or receiving the special assessment.
Additional special assessments are still likely with the increased income limitation, but not as many as population counts
may suggest.
Senate Dual Referral Rules House
13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
John D. Carpenter
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} Legislative Fiscal Officer
or a Net Fee Decrease {S}