Counties Urge Local Autonomy on Costly Tax Exemption

MACo Legislative Director Kevin Kinnally this week testified before the House Ways and Means Committee in opposition to HB 224 and SB 148 – Property Tax Exemption – Disabled Veterans. This bill would significantly expand an existing property tax exemption for disabled veterans and surviving spouses.

MACo is concerned with the carryover county fiscal effects of this legislation and would prefer approaches that provide local autonomy to determine the best way to offer tax incentives, rather than those that mandate reductions in local revenue sources.

As such, Kinnally urged the Committee to consider HB 103, which, as amended, authorizes local governments to grant a property tax credit for disabled veterans that is equal to the percentage of the disabled veteran’s service-connected disability rating. MACo supports HB 103, as it offers local flexibility for local property tax incentives.

From the MACo testimony

Under current law, for a property tax exemption to be granted to a disabled veteran or surviving spouse, the disabled veteran must have a 100% service-connected disability. However, if the exemption is expanded to include veterans with at least an 80% service connected disability, counties could lose up to $12.8 million of their most reliable revenue source per annum, according to the bill’s 2022 fiscal note. This is county revenue sorely needed to fund education, public health, public safety, infrastructure, and other essential services.

In general, MACo stands for local self-determination. Counties, led by their elected leaders who are directly accountable within the community, are in the best position to make decisions on local affairs – ranging from land use to budget priorities.

The bill’s crossfile, SB 148, will be heard on February 9 in the Senate Budget and Taxation Committee.

More on MACo’s Advocacy:

Follow MACo’s advocacy efforts during the 2022 legislative session on MACo’s Legislative Tracking Database.
Learn more about MACo’s 2022 Legislative Initiatives.
Read more General Assembly News on MACo’s Conduit Street blog.

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