Local Government Fiscal Transparency (Oppose – Mandate)

Local Government Fiscal Transparency (Oppose – Mandate)

HB 7 (Burton) amends multiple provisions related to local government financial transparency. The bill expands public notice and public hearing requirements for local option tax increases, other than property taxes and new long-term tax-supported debt issuances. The language requires each local government to prominently post on its website the voting records on any action taken by its governing board related to tax increases and new tax-supported debt issuance. The bill imposes requirements on county property appraisers and local governments relating to TRIM notices, millage rate history and the amount of tax levied by each taxing authority on each parcel.

Additionally, local governments are required to conduct a debt affordability analysis prior to approving the issuance of new long-term tax-supported debt. The analysis would, at a minimum, calculate a debt affordability ratio to gauge the effects of the new debt issuance on the government’s debt service to revenue profile. The debt affordability ratio is the annual debt service for outstanding tax-supported debt divided by total annual revenues available to pay debt service on outstanding debt.

The bill requires the local government annual audit reports to include information regarding compliance with the requirements of this newly created section of law. Failure to comply could ultimately result in the withholding of state-shared revenues.  

The bill revises the local government reporting requirements for economic development incentives. It requires each municipality to report to the Office of Economic and Demographic Research whether the incentive was provided directly to an individual business or by another entity on behalf of the local government and the source of dollars obligated for the incentive (including local, state and federal). The bill also revises the statutory classes of economic development incentives. (Hughes)