| | Fiscal Note (Dept. of Revenue) |
| | To estimate the cost the Department added to the estimate the number of senior homeowners who did not file an income tax return and the number of homeowners under the age of 65 who did not file an income tax return. Not all non-filers are homeowners. The Department estimated that between 40 percent and 70 percent of non-filers are also homeowners. The Department also added back the number of income tax filers that paid property tax but did not claim the property tax credit. This gives a potential range of refund claims between 2,634,360 and 2,851,638.
The total cost of the credits is each end of the range multiplied by the $500 refund. The total cost estimate is between $1,317,000,000 and $1,430,000,000. To calculate the marginal cost of the refund we must back out to cost of the current credit leaving us with a marginal (or budgetary) cost of between $760 million and $873 million. The theoretical maximum cost of the credit can be arrived at by taking the total number of homestead exemptions multiplied $500 by less than the current credit cost (3,185,765 * 500) - 556,000,000 = $1,036,333,660. The final annual cost range is between $760 million and $1.036 billion.
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