Lt. Gov. Phil Bryant says he supports a proposal to increase the homestead exemption for persons over 65 or the totally disabled from the current $75,000 level to $100,000.

Bryant’s proposal also would adjust the homestead exemption that applies to all other homeowners.

Under homestead exemptions, the state encourages people to own homes by exempting the houses from some property taxes. The state reimburses the counties and cities for lost tax revenues.

Under state law, for homeowners 65 years of age or totally disabled, there is an exemption on the first $75,000 true value.

However, recent property reappraisals in several counties, including Hinds and Rankin counties, have pushed some property values over $75,000, which means some elderly Mississippians would be paying taxes for the first time in years.

Bryant said Thursday that he has talked with Senate President Pro Tempore Billy Hewes, R-Gulfport, and Finance Committee Chairman Dean Kirby, R-Pearl, about getting the issue addressed early in the 2009 session. The 2009 Legislature convenes Jan. 6.

“This unfair tax burden on citizens occurred prior to my taking office but it is my intent to fix it now that I am here,” Bryant said.

The issue creates a dilemma for county officials.

Under state law, the maximum exemption for regular homeowners is $300.

Mississippi law says county governments shall get refunds of $100 per applicant getting an exemption in county and school taxes — half of which goes to the schools. For cities, the reimbursement is $200 per qualified applicant.

Generally, counties reappraise every four years, with a handful of counties undergoing reappraisal every year.

Counties can grow their budgets 10 percent a year. To stay within that 10 percent after reappraisal when property values increase, counties drop the millage rate.

What has happened is that with reappraisal putting property over $75,000, many disabled and elderly homeowners for the first time are seeing a tax bill.

That runs contrary to the perception for many elderly Mississippians who believed that once they reach 65 they were exempt from property taxes, when only the first $75,000 is exempt.

County officials expect the Legislature to be pressed to increase the exemption to $100,000. If that happens, all the people going on the tax rolls after reappraisal will fall off and the counties will have to raise the millage the next year to cover the revenue drop.

“It is a sensitive issue with a lot of folks, especially the elderly and the disabled,” said Joel Yelverton, assistant executive director of the Mississippi Association of Supervisors. “We understand that at the local level. Reimbursement is something we hope the Legislature will consider increasing in the future.”

In 2008, the Legislature appropriated $83.9 million for homestead exemption reimbursement.