Summary:

 House Bill 292 (HB 292) establishes the All Cities and Counties Fund, directing a portion of Gross Receipts Tax revenue to municipalities and counties based on a formula that accounts for population and local tax revenues. The bill requires annual distributions to ensure stable and equitable funding for local governments. The fund takes effect July 1, 2025. 

Legislation Overview:

 House Bill 292 (HB 292) creates the All Cities and Counties Fund in the state treasury, ensuring that a portion of Gross Receipts Tax (GRT) revenue is allocated to municipalities and counties. The Taxation and Revenue Department (TRD) is responsible for calculating and certifying the annual distribution amounts based on a formula incorporating municipal population, county revenue levels, and equalized tax revenue across jurisdictions.

The formula allocates 70% of funding based on state population and 30% based on local GRT revenue contributions, ensuring that rural and lower-revenue counties receive equitable funding alongside high-revenue areas. By October 1 of each year, TRD must certify distribution amounts, and by November 1, the state treasurer must transfer funds to municipalities and counties.

The bill ensures that GRT revenue allocations remain predictable, reducing budgetary uncertainty for local governments. The 8% of net GRT revenue distributable to the General Fund will be redirected to the All Cities and Counties Fund to finance distributions.

Implications
HB 292 provides dedicated and stable funding for local governments, ensuring that municipalities and counties receive annual allocations from GRT revenue. The formula-based approach reduces political discretion, ensuring that funding is equitably distributed based on objective criteria.

The redirection of 8% of net GRT revenue from the General Fund may reduce funding available for state-level programs, requiring budget adjustments to offset the revenue shift. However, the bill ensures more reliable funding streams for local infrastructure, public safety, and essential services.

Local governments will benefit from greater financial stability, allowing for better long-term planning, but the effectiveness of the formula in addressing disparities across counties will depend on future revenue fluctuations and tax base growth.
 

Current Law:

 Under current law, GRT revenue allocations to municipalities and counties vary based on local tax collections and discretionary appropriations. There is no standardized statewide formula ensuring equalized distributions. HB 292 establishes a formalized system, ensuring that all cities and counties receive guaranteed funding from GRT revenue.