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~ . 'e e e district which would have received $21.50 in revenue from a parcel of property in the flIst year would receive no revenue from that property if the Amendment passes. For a school district which has an override levy in addition to its general fund levy, it is unclear whether the required tax cut will be applied 10 the override levy, the general fund levy or on a pro rata basis. The General Assembly may ultimately legislate this. Some analysts have speculated that the tax cut could apply to each individual tax levied by a single taxing entity. For example, counties typically levy a tax for the general fund, the road and bridge fund, social services expenditures and debt service. In some counties, these are shown as separate line items on a tax bill; in others the levies are combined to show as a single tax on the tax bill. However, the more reasonable argument is that each taxing entity will suffer only one reduction per year rather than multiple reductions for each line item. The Title Board estimated that the minimum amount oflost property tax revenue will be approximately $114.4 million for tax bills due in 2002 (which it assumes to be the first property tax collection year to which the Amendment will apply). Additional Reductions to ProoerlY Tax Revenue. In addition, local government property tax revenue may be further reduced due to mandated tax cuts on the collection of sales taxes on food and drink (except for alcohol and tobacco). This tax cut is discussed in further detail in Question 8. Question 7. How does the Amendment impact the sales tax? Sales taxes imposed by the State and by local governments are impacted in two ways. First, any sales tax which is levied on consumers for various utility services such as gas, electricity, telephone, and cable television will be reduced in 2001. Utilities typically bill their customers monthly; the monthly charge includes the sales taxes imposed by governments. While the issue is not settled, it is possible that the Amendment will require the tax cut to be applied to each monthly bill. (The Amendment states that "a $25 tax cut...shalllower each tax in each tax bill... "). Because such taxes rarely total $25 per month, for most consumers this interpretation would effectively eliminate these taxes. The State believes that the fiscal impact of this sales tax cut will be significant but is unable to quantify the amount; however, the State Department of Local Affairs ("DOLA") estimates that local governments would lose approximately $39.1 million in revenue in 2001. Second, the Amendment will cut the sales and use taxes imposed on the sale of vehicles. DOLA estimates that local government revenue lost as a result of this cut in 2001 will be $38.9 million and the State Office of Planning and Budget estimates a State loss of$35 million from January I through June 30, 2003 (two and one-half fiscal years). Losses in this category will increase each year; for example, ifa vehicle is purchased in a2003, the Amendment's tax cut is $75. on that vehicle. 3