In January, Ward 4 Councilmember Brandon Todd introduced a bill that would increase the limit of the homestead exemption in DC. The deduction works by reducing the tax assessment value of a given property. The Homestead Exemption Increase Amendment Act of 2019 would increase the exemption from $74,850 to $125,000 for single-family homes and residential co-ops.
However, while the bill is under review by the Committee on Finance and Revenue, the Chief Financial Officer (CFO) has submitted a Fiscal Impact Statement (FIS) that doesn't bode well for the bill's passage.
"Funds are not sufficient in the fiscal year 2019 through fiscal year 2022 budget and financial plan to implement the bill," the statement begins. "The bill will reduce real property tax revenues by $37.2 million beginning in fiscal year 2020 and $115 million over the four-year financial plan."
Interestingly, last July, a nearly identical bill was introduced or co-sponsored by every councilmember except for Chair Phil Mendelson and At-Large councilmembers Anita Bonds, Elissa Silverman, Robert White. It doesn't appear that the office of the CFO submitted an FIS at the time, although the assistant general counsel of the Office of Tax and Revenue recommended minor amendments to the bill pertaining to timing and calculation of cost-of-living adjustments.
In the bill's current iteration, the deduction would be effective as of October 1, 2019, and would be adjusted for cost-of-living annually starting October 1, 2020.
This article originally published at http://dc.urbanturf.com/articles/blog/cfo-dc-cant-afford-to-increase-the-homestead-deduction/15027
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