A half dozen bills have already been filed in the Kentucky General Assembly this session to lower property taxes on homeowners through a constitutional amendment, with one clearing a Senate committee Wednesday.
Senate Bill 51 of Republican Sen. Mike Nemes from Shepherdsville would seek to amend the Kentucky Constitution to prevent the elderly from facing higher property tax bills on their home due to valuation increases. Those 65 and older would still have to pay property taxes on their primary residence, but the home’s valuation would be locked in.
Nemes told lawmakers in the committee they are trying to help out the elderly, many of whom are on fixed incomes and could be stung by a sudden increase in their home’s value.
“As we know, the assessments have been going up on them, and a lot of people are having income problems on fixed income,” Nemes said. “We need to help them.”
As an example of how the change would work, Nemes said if the homestead residence of an elderly Kentuckian was valued at $200,000, but then assessed to increase to $300,000, they would still pay the property tax rate for just $200,000.
If SB 51 passed both chambers with at least three-fifths of the vote, it would go on the ballot in November as a referendum for voters to either approve or disapprove the constitutional amendment.
The bill cleared the committee unanimously, with GOP Sen. Julie Raque Adams of Louisville calling the homestead tax issue “probably the number one thing that I get calls and emails about in my district.”
Democratic Sen. Cassie Chambers Armstrong of Louisville said she voted for SB 51 because it was needed for low-income seniors, but wished there was means testing in the bill to not apply to the wealthy, suggesting it not apply to homes worth more than $1 million or $2 million.
Five different bills related to a homestead tax exemption for the elderly have been filed in the House, with the one filed by Democratic Rep. Daniel Grossberg of Louisville capping the exemption on homes valued at $500,000.
Two other bills with Republican sponsors are identical to that of Nemes, while two other GOP bills seek to amend the constitution from its current exemption of $49,000 of an elderly person’s home value, to $75,000 and $100,000, respectively.
Nemes has led a similar homestead tax bill to passage in the Senate several times, but hopes House Republicans will finally also advance it to the ballot this session.
Asked if the House Republican supermajority is more favorable to the homestead tax amendment this session, GOP House Speaker David Osborne of Prospect said Wednesday that his caucus has had “general discussions about it, but nothing that we've gained any consensus about at this point.”
Nemes said a fiscal note prepared by legislative staffers estimated his bill would decrease state tax revenue by roughly $5.5 million annually. Local governments also set property tax rates and rely heavily on such revenue, but he said there was not yet a local impact statement prepared for his bill.
Nemes said that he hasn’t heard any objections to his bill yet from local government associations, “because they'll probably be thrown out of office if they start hollering about that little bit of money.”
“If (local governments) really are concerned about that, they want more money than they had last year... they can raise the (property tax) rate that would offset that.”
Nemes said Republican lawmakers have cut the income tax rate over the past decade since taking back the House majority, and his measure would pass on relief to those who are now retired.
“We've helped the working class people with the income tax,” Nemes said. “Well, these elderly people have paid income tax all these years, and now they're not paying income tax. We need to help them also.”
