Increasing property tax exemptions for homeowners in Mississippi appears dead in this year’s legislative session, but lines of support and opposition are likely to remain intact.

Two state associations representing elected officials remain on opposite sides. Tax assessors and collectors favor increasing the exemption for those 65 and older. Supervisors oppose expanding the exemptions for fear general funds already threatened by the sagging economy will continue to shrink.

“Every member of our association has been advocating an increase in homestead exemption levels,” said David Melton, Grenada County Assessor/Collector and president of the Mississippi Association of Collectors and Assessors.

The exemptions reduce some of the local property taxes that would normally be due if a home is owner-occupied and the exemption increases for older homeowners. Counties are supposed to have all the foregone revenue replaced by the state. However, because the exemption is a dollar amount and is not tied to value, when property values increase the benefit of the exemption is reduced.

“Raising of homestead exemption levels is periodically necessary in order to keep tax burdens from being shifted onto homeowners when property is reassessed,” Melton said.

Warren County Tax Collector Pat Simrall, a past president of the organization and past winner of a distinguished service award, said she supports the group’s position. “I think it should be passed.”

Locally, shortages in revenue from homestead exemption reimbursements and car tag sales are evident, estimate county officials.

Car tag sales are short about $28,000 over last year, according to forecasts from the Tax Collector’s Office. Applications for homestead exemptions were up slightly in 2008, to 11,416 from 11,359 in 2007 — meaning the county lost more property tax revenue on the front end but will be reimbursed more from the state. Warren County expects reimbursements to total $570,870 by March 1, up about $3,000 over last year.

Sixteen bills were filed in this year’s Legislature dealing with increases in the exemption, currently covering the first $7,500 in assessed value. Some would have raised that up to $10,000, while some were targeted to specific groups such as taxpayers over 65 and military veterans.

One bill still alive is Senate Bill 2862, which would allow homestead exemptions for those in the Katrina federal disaster area to stay in place as long as repairs have begun. It is before the House Ways and Means Committee.

Supervisors in 20 counties that updated property values this year, including Rankin, Jackson and Pike counties, Melton said, also supported some type of rise in the homestead exemption.

Warren County, which saw values grow just half a percent in 2008, also raised millage rates to compensate for high energy prices and the beginning of the study into a new county jail.

Supervisors have sided with the Mississippi Association of Supervisors, which lobbied hard against all efforts to raise the exemption.

Board President Richard George said this week he did not oppose targeted hikes in the exemptions, such as for older taxpayers, but was noncommittal on exemption hikes if applied regardless of age.

What worries the board, he said, was the combined presence of exemption-related bills and attempts to reduce or remove the inventory tax on businesses, something the current board has shied away from in favor of improvement-related incentives.

“It’s the offset of the loss of revenue that was the issue,” George said.

One remaining bill to be considered is Senate Bill 3272, which would create a 50 percent tax credit on inventory, dependent on growth in the state’s general fund. It is before the House Ways and Means Committee. Sen. Briggs Hopson, R-Vicksburg, supported the measure in the Senate, which passed 36-13 with three voting either present or not voting.

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Contact Danny Barrett Jr. at dbarrett@vicksburgpost.com.