Presentation on theme: "LOCAL TAXES IS THE BURDEN SHIFTING? Presented by Joe Young Stennis Institute of Government."— Presentation transcript:
LOCAL TAXES IS THE BURDEN SHIFTING? Presented by Joe Young Stennis Institute of Government
IS THERE AN AD VALOREM TAX SHIFT IN MISSISSIPPI?
TOTAL AD VALOREM ASSESSED VALUE IN MISSISSIPPI FY 2002 FY 2012% CHANGE BY CLASS CLASS I (SINGLE FAMILY OWNER OCCUPIED RESIDENTIAL REAL PROPERTY) $ 4,458,485,595 $ 6,715,758,76851% CLASS II (ALL REAL PROPERTY NOT CLASS I) $ 5,935,591,704 $ 9,039,012,51752% CLASS III (BUSINESS PERSONAL PROPERTY INCLUDING MOBILE HOMES) $ 3,240,493,621 $ 4,553,359,68541% CLASS IV (PUBLIC UTILITY PROPERTY) $ 2,251,948,931 $ 2,599,658,30815% CLASS V (MOTOR VEHICLES) $ 3,445,006,895 $ 3,281,762,384-5% TOTAL $ 19,331,526,746 $ 26,189,551,66235%
IS THERE A TAX SHIFT IN MISSISSIPPI? YES! WHY? REAL PROPERTY AND PERSONAL PROPERTY VALUES ARE INCREASING AT A MUCH FASTER RATE THAN PUBLIC UTILITIES AND MOTOR VEHICLES
WHY ARE REAL PROPERTY AND PERSONAL PROPERTY VALUES INCREASING AT THIS PACE? NEW GROWTH STATE LAW REQUIRES REAL AND PERSONAL PROPERTY VALUES TO BE UPDATED EVERY 4 YEARS COUNTIES MUST COMPLY WITH DOR REGULATIONS PASSING STATISTICAL TEST OR FACE PENALTIES CURRENTLY THERE ARE NO LAWS AND REGULATIONS REQUIRING DOR TO MEET COMPILANCE RULES FOR MOTOR VEHICLES AND PUBLIC UTILITIY ASSESSMENTS
WHY IS THE ASSESSED VALUE OF MOTOR VEHICLES DECLINING IN THE STATE OF MISSISSIPPI???
REASONS PEOPLE ACROSS THE U.S. ARE KEEPING THERE CARS LONGER THAN EVER BEFORE THE DEPRECIATION TABLE FOR MOTOR VEHICLES ESTABLISHED BY THE DOR HAS NOT CHANGED TO REFLECT THAT FACT
WALL STREET JOURNAL Dec 26, 2013 Cars on American Roads are Older Than Ever By MIKE RAMSEYMIKE RAMSEY “Vehicles on U.S. roads have never been older, now averaging 11.3 years, as the quality of vehicle construction has improved and the economic slowdown of the past four years combined to keep people in vehicles longer, according to recent research from IHS Automotive The average age of a vehicle will continue to increase over the next few years, but at a slower pace, rising to a forecasted 11.5 years through 2018.”
Cars on American Roads are Older Than Ever (cont). “As the economy worsened in 2008, people decided to hold on to vehicles longer to avoid a big purchase, causing the age of vehicles on the road to increase.”
IHS AUTOMOTIVE by R L Polk Polk Finds Average Age of Light Vehicles Continues to Rise SOUTHFIELD, Mich. (August 6, 2013) – The U.S. vehicle fleet population is changing, a shift that gives way to significant opportunities for certain automotive aftermarket segments according to Polk, the global automotive market intelligence firm recently acquired by IHS (NYSE: IHS).
IHS AUTOMOTIVE by R L Polk (cont) As part of its analysis, Polk reports the average age of all light vehicles on the road now stands at a record high of 11.4 years, based on review of over 247-million U.S. car and light truck registrations earlier this year. For passenger cars, average age also met a record high at 11.4 years, while the average age of light trucks also increased to a record 11.3 years. Polk expects this trend to continue, while a shift in the fleet of vehicles in operation (VIO) is underway.
IHS AUTOMOTIVE by R L Polk YearPassenger CarsLight TrucksTotal Light Vehicles
MISSISSIPPI MOTOR VEHICLE ASSESSED VALUE TABLE YEAREFFECTIVEPERCENT GOODDEPRECIATION RATE NEW0.2790%10% %23% %37% % %60% %70% %77% %83% %87% %90% 10ALL AT $100 ASSESSED VALUE
EXAMPLE OF VALUES OF CARS IN MISSISSIPPI YEARORIGINALPERCENT GOODTRUE VALUESASSESSED VALUE TRUE VALUE NEW$30,00090%$27,000$8,100 1$30,00077%$23,100$6,930 2$30,00063%$18,900$5,670 3$30,00050%$15,000$4,500 4$30,00040%$12,000$3,600 5$30,00030%$9,000$2,700 6$30,00023%$6,900$2,070 7$30,00017%$5,100$1,530 8$30,00013%$3,900$1,170 9$30,00010%$3,000$900 10$30,000$300 ALL AT $100 ASSESSED VALUE
PUBLIC UTILITY ASSESSMENTS IN MISSISSIPPI PERFORMED BY DOR UNIT APPROACH TO VALUE POSSIBLE CONCERNS