The bill also makes a variety of changes to the Homestead Property Tax Credit:

a) Taxpayers will no longer be eligible for the credit if the taxable value of their homestead exceeds $135,000. (For a new home, this limit equates to a sale value of $270,000.)

b) The credit will be phased out starting at total household resources of $41,000 and be eliminated once total household resources reach $50,000. Under current law, the phase-out does not begin until household income exceeds $73,650.

c) Under current law, the credit equals some percentage of the property taxes that exceed 3.5% of household income, regardless of income. The applicable percentage varies, with most taxpayers receiving 60%, while seniors and disabled individuals are able to receive 100%. The bill will eliminate the difference in rates between seniors and most taxpayers, setting the applicable percentage at 60%. However, for senior citizens with income of $21,000 or less, the bill makes the applicable percentage 100%, phasing it down in four percentage point increments every $1,000 of household resources until the applicable percentage declines to 60% at household resources of $30,000.

In addition, House Bill 4361 alters the individual income tax rate levied in future years. Under current law, the tax rate is scheduled to decline from 4.35% to 4.25% on October 1, 2011. The rate then is scheduled to drop another 0.1 percentage point each subsequent October 1, until October 1, 2015, when the rate is to decline 0.05 percentage point, to 3.9%. The bill postpones the first rate reduction until January 1, 2013, and eliminates any subsequent rate reductions. As a result, the bill keeps the tax rate at 4.35% through January 1, 2013, and then lowers it to 4.25%, where it will remain.