Lawmakers looking at ways to identify Arkansans who are wrongly claiming multiple homestead-tax exemptions heard from an official Monday who questioned how widespread the problem is.
The tax credits, adopted by voters in 2000 through Amendment 79, are worth $350 each year off one's real property tax bill. Homeowners may only claim one credit, on their "principal place of residence."
Counties recoup the property tax revenue lost, because of the credit, through reimbursements paid out of state sales tax dollars.
But lawmakers have claimed for years that the state is taking a substantial hit because of people claiming multiple credits in different counties, because there is no central database for county assessors to check each claim. Then-state Sen. Eddie Joe Williams, R-Cabot, suggested last fall that the cost to the state could be tens of millions of dollars a year.
But for lawmakers at a joint meeting of the House and Senate State Agencies and Governmental Affairs committees, what they heard Monday seemed to counteract those claims.
"This comes up from time to time, and when it does, it tends to be someone running for office, maybe someone who catches the attention of the news media," said Lindsey Bailey, an attorney for the Association of Arkansas Counties, referring to several candidates who have been caught claiming multiple exemptions.
"I'm here to say, when we run the numbers, it's not as big a problem as it seems."
When her association looked into the issue recently, Bailey said, they polled 30 counties representing 318,000 parcels of land -- a little less than half of the 700,000 parcels claiming the credit statewide -- and identified 114 that were potential duplicates.
If confirmed to be actual duplicates, those credits would cost the state $39,900.
Bailey's comments led the chairman of the House committee, Rep. Bob Ballinger, R-Hindsville, to inquire how much work went into checking the names of the people claiming credits with each county, and whether it would be cost effective to do so on a statewide level.
"The question is, if what you're talking about is 30 man-hours, then all of a sudden you're talking about a great return on investment ... even in that small sample," Ballinger said. "If what we are talking about is 1 percent of the parcels, we're talking about real money."
The committee adjourned without taking any action on the issue. The discussion was part of a proposal to study the issue, and come up with possible solutions, ahead of the next general legislative session in 2019.
One possible solution proposed by the committee members was creating a statewide database, or paying a third party to check for duplicates. No estimate was given for how much a statewide system would cost.
Phillip Carper, an account executive with DataScout LLC in Little Rock, said his company sells a service to about two-thirds of Arkansas counties that checks for duplicate claims. He said his company offers its service for between $3,000 and $5,000 per county.
Of the states around Arkansas that offer a homestead credit -- Alabama, Mississippi, Oklahoma and Texas -- only Mississippi has a statewide system that checks for duplicates, Bailey said.
Metro on 01/09/2018