The House Ways & Means Committee Introduced the Following Committee Bills
(At the meeting on March 8, 2017)
Local Government Fiscal Responsibility – HB 7063
(House Ways & Means Committee)Staff Analysis
Local Government Fiscal Transparency- HB 7065
(House Ways & Means Committee) Staff Analysis
Brief Summary of the Bills:
Local Government Fiscal Responsibility – HB 7063 (House Ways & Means Committee)
- Local governments, except schools, cannot adopt millage over the rolled-back rate unless they spend down “excess unencumbered fund balances” in special revenue funds below 10% for that fiscal year. In effect, this prohibits property tax increases unless excess fund balances are spent down.
- Prohibits cities and counties (exempts schools) from enacting, extending or increasing local option taxes other than property taxes, if they had adopted a millage rate in excess of the rolled-back rate (with certain specified exceptions) in any of the three previous years.
- Requires any local option or property tax (including special districts) that currently require voter approval to be on a state general election ballot with a 60% threshold for passage.
- For example- CST, local business tax, local option surtaxes, TDT, public service tax, gas taxes.
- Requires that a school capital outlay resolution must be approved by a 4/5 vote of the school board to place the question on the ballot for voter approval.
- Requires voter approval for any new tax-supported debt (beyond 5 years) and must be on a state general election ballot with a 60% threshold for passage.
- This does not apply to debt that is secured solely by the revenues generated by the project that is financed with the debt.
- An exception is allowed in the case of an emergency as defined by ch. 252 -Emergency Management. The governing board, by a 4/5 vote, can authorize a vote at an election other than the general election, while still requiring 60% voter approval and the proceeds only being used for a purpose directly related said emergency.
- Effective October 1, 2018
Local Government Fiscal Transparency- HB 7065 (House Ways & Means Committee)
- Requires additional public meetings and public notice requirements for local option tax increases, other than property taxes, and new, long-term tax-supported debt.
- Requires additional information on website such as voting records for tax increases and issuance of tax-supported debt, history of millage rates and levies, etc.
- Requires local governments to conduct and consider debt affordability analysis prior to approving new, long-term tax-supported debt that includes calculating a debt affordability ratio.
- The debt affordability ratio is the annual debt service for outstanding tax-supported debt divided by total annual revenues available to pay debt service on outstanding debt.
- Requires auditor to report whether the local government is complying these new provisions and sets a timeline for response/corrective action to the Auditor General.
- Effective July 1, 2017