2023 And 2024 Property Tax

For the 2023 property tax year:

• Section 1 of the act reduces the valuation for assessment of nonresidential property, excluding agricultural and renewable energy production nonresidential property, from 29% of the actual value of the property to 27.9% of the actual value of the property;
• Section 2 reduces the valuation for assessment of residential property, including multi-family residential property, to 6.765% of the actual value of the property; and
• Sections 1 and 3 reduce the actual value used for purposes of the valuation for assessment of commercial real property by $30,000 and of residential real property by $15,000, but in either case to no less than $1,000.

For the 2024 property tax year:

• Section 1 continues the valuation for assessment of real and personal property that is classified as agricultural property or renewable energy production property at 26.4% of the actual value of the property;
• Section 2 establishes the valuation for assessment for all residential real property other than multi-family residential real property as the percentage of the actual value of such property determined by a calculation made by the property tax administrator as required by section 4; and
• Section 2 also establishes the valuation for assessment for multi-family residential real property as 6.8% of the actual value of the property.

Section 4 requires the adjustment of the ratio of valuation for assessment for all residential real property other than multi-family residential real property for the 2024 property tax year so that the aggregate decrease in local government property tax revenue during the 2023 and 2024 property tax years, as a result of the act, equals $700 million.

Section 5 requires the state treasurer to reimburse counties for the reduction in property tax revenue resulting from the act during the 2023 property tax year and requires the property tax administrator, using information provided by each county treasurer, to report this amount to the general assembly. The state treasurer is required to fully reimburse any county that:

• Had an increase of less than 10% in assessed value of real property between the 2022 and 2023 property tax years; and
• Has a population of 300,000 or fewer.

The state treasurer is also required to reimburse a county 90% of the amount of the reduction if the county:

• Had an increase of 10% or more in assessed value of real property between the 2022 and 2023 property tax years; and
• Has a population of 300,000 or fewer.

Lastly, the state treasurer is also required to reimburse any county that does not qualify for full or 90% reimbursement 65% of the amount of the reduction excluding the aggregate decrease in local government property tax revenue during the 2023 and 2024 property tax years, as a result of the act for municipalities, fire districts, health services districts, water districts, sanitation districts, school districts, and library districts in those counties. If municipalities, fire districts, health services districts, water districts, sanitation districts, and library districts in those counties had an increase of less than 10 % in assessed value of real property between the 2022 and 2023 property tax years, the state treasurer is required to reimburse the entire amount of the aggregate decrease in local government property tax revenue for those local governmental entities during the 2023 property tax years, as a result of the act. If municipalities, fire districts, health services districts, water districts sanitation districts, and library districts in those counties had an increase of 10% or more in assessed value of real property between the 2022 and 2023 property tax years, the state treasurer is required to reimburse 90% of the aggregate decrease in local government property tax revenue for those local governmental entities during the 2023 property tax years, as a result of the act. County treasurers must then distribute these reimbursements to the local governmental entities, excluding school districts, within the treasurer's county as if the revenue had been regularly paid as property tax. The lesser of $240 million of reimbursement or the amount of reimbursement that can be paid from such excess state revenues must be paid as a refund of state fiscal year 2022-23 excess state revenues that are not being refunded through specified existing refund mechanisms, and the rest of the reimbursement must be paid from the general fund.

For school districts, section 6 requires the state treasurer to transfer $200 million from the general fund to the state public school fund to offset school district property tax revenue reductions.

Section 5 also requires the property tax administrator to prepare a report that identifies the aggregate reduction in local government property tax revenue during the 2023 property tax year resulting from the act.

(Note: This summary applies to this bill as enacted.)