Bill description: SB 1417 makes several significant changes to property tax policy commonly referred to as the “circuit breaker.”
Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments?
SB 1417 would decrease property taxes for a narrowly defined group of taxpayers, based on income and other defined characteristics. This decrease, commonly known as the “circuit breaker,” is based on numbers that have not been adjusted since 2006. The total fiscal impact is estimated at $6.7 million.
Does it increase government redistribution of wealth?
SB 1417 increases the circuit breaker from $1,320 to $2,000 using money that would otherwise go to the General Fund. This is problematic for a number of reasons. It represents a redistribution of wealth because people pay sales and income taxes, and money from those taxes buys down the property taxes of a select set of taxpayers. The circuit breaker uses General Fund money to offset local government’s property taxes, essentially subsidizing local property taxes.
If the Consumer Price Index adjustment were applied to the circuit breaker amount of $1,320 in 2006, the adjustment would equate to $1,717 in 2020. (This calculation was made using the Bureau of Labor Statistics calculator). This bill would increase the reduction amount to a maximum of $2,000, which aims at, but overshoots, the increase in cost of living we have seen over the past 14 years. The increase in the circuit breaker goes beyond the amount necessary to catch up to inflation.
STAY CONNECTED with the latest news, research and opinions from the Gem State.