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 2002-2012
FY 2002
FY 2012
% CHANGE BY CLASS
CLASS I (SINGLE FAMILY
OWNER OCCUPIED
RESIDENTIAL REAL
PROPERTY)
$ 4,458,485,595
$ 6,715,758,768
51%
CLASS II (ALL REAL
PROPERTY NOT CLASS I)
$ 5,935,591,704
$ 9,039,012,517
52%
CLASS III (BUSINESS
PERSONAL PROPERTY
INCLUDING MOBILE
HOMES)
$ 3,240,493,621
$ 4,553,359,685
41%
CLASS IV (PUBLIC UTILITY
PROPERTY)
$ 2,251,948,931
$ 2,599,658,308
15%
CLASS V (MOTOR
VEHICLES)
$ 3,445,006,895
$ 3,281,762,384
-5%
TOTAL
$ 19,331,526,746
$ 26,189,551,662
35%
$10,000,000,000
$9,000,000,000
$8,000,000,000
$7,000,000,000
CLASS I (SINGLE FAMILY OWNER OCCUPIED RESIDENTIAL
REAL PROPERTY)
$6,000,000,000
CLASS II (ALL REAL PROPERTY NOT CLASS I)
$5,000,000,000
$4,000,000,000
CLASS III (BUSINESS PERSONAL PROPERTY INCLUDING
MOBILE HOMES)
$3,000,000,000
CLASS IV (PUBLIC UTILITY PROPERTY)
$2,000,000,000
CLASS V (MOTOR VEHICLES)
$1,000,000,000
$FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
FY 2002
CLASS V (MOTOR VEHICLES)
18%
CLASS I (SINGLE FAMILY
OWNER OCCUPIED
RESIDENTIAL REAL PROPERTY)
23%
CLASS IV (PUBLIC UTILITY
PROPERTY)
11%
CLASS III (BUSINESS
PERSONAL PROPERTY
INCLUDING MOBILE
HOMES)
17%
CLASS II (ALL REAL PROPERTY
NOT CLASS I)
31%
CLASS V (MOTOR
VEHICLES)
13%
FY 2012
CLASS IV (PUBLIC
UTILITY PROPERTY)
10%
CLASS III (BUSINESS PERSONAL
PROPERTY INCLUDING MOBILE
HOMES)
17%
CLASS I (SINGLE FAMILY
OWNER OCCUPIED
RESIDENTIAL REAL PROPERTY)
26%
CLASS II (ALL REAL PROPERTY
NOT CLASS I)
34%
FY 2002
CLASS V (MOTOR VEHICLES)
18%
CLASS IV (PUBLIC UTILITY
PROPERTY)
11%
CLASS III (BUSINESS PERSONAL
PROPERTY INCLUDING MOBILE
HOMES)
17%
CLASS I AND II (ALL REAL
PROPERTY)
54%
CLASS V (MOTOR VEHICLES)
13%
FY 2012
CLASS IV (PUBLIC UTILITY
PROPERTY)
10%
CLASS III (BUSINESS PERSONAL
PROPERTY INCLUDING MOBILE
HOMES)
17%
CLASS I AND II (ALL REAL
PROPERTY)
60%
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 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
Year
Passenger Cars
Light Trucks
Total Light Vehicles
2002
9.8
9.4
9.6
2003
9.9
9.5
9.7
2004
10.0
9.5
9.8
2005
10.1
9.5
9.8
2006
10.2
9.5
9.9
2007
10.3
9.6
10.0
2008
10.4
9.8
10.1
2009
10.5
10.1
10.3
2010
10.8
10.5
10.6
2011
11.1
10.8
10.9
2012
11.3
11.1
11.2
2013
11.4
11.3
11.4
MISSISSIPPI MOTOR VEHICLE ASSESSED VALUE TABLE
YEAR
EFFECTIVE
PERCENT GOOD
DEPRECIATION
RATE
NEW
0.27
90%
10%
1
0.23
77%
23%
2
0.19
63%
37%
3
0.15
50%
50%
4
0.12
40%
60%
5
0.09
30%
70%
6
0.07
23%
77%
7
0.05
17%
83%
8
0.04
13%
87%
9
0.03
10%
90%
10
ALL AT $100 ASSESSED VALUE
EXAMPLE OF VALUES OF CARS IN MISSISSIPPI
YEAR
ORIGINAL
PERCENT GOOD
TRUE VALUES
ASSESSED VALUE
TRUE VALUE
NEW
$30,000
90%
$27,000
$8,100
1
$30,000
77%
$23,100
$6,930
2
$30,000
63%
$18,900
$5,670
3
$30,000
50%
$15,000
$4,500
4
$30,000
40%
$12,000
$3,600
5
$30,000
30%
$9,000
$2,700
6
$30,000
23%
$6,900
$2,070
7
$30,000
17%
$5,100
$1,530
8
$30,000
13%
$3,900
$1,170
9
$30,000
10%
$3,000
$900
10
$30,000
ALL AT $100
$300 ASSESSED VALUE
•
•
•
•
PUBLIC UTILITY ASSESSMENTS IN MISSISSIPPI
PERFORMED BY DOR
UNIT APPROACH TO VALUE
POSSIBLE CONCERNS
For more information
Joe Young
[email protected]
Cell - 601.248.7809