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Tax Cap and Budge-ng 2016 -‐ 2017
Board of Educa+on Mee+ng Wednesday, January 13, 2016 D. Paul Blowers & Brian D. Russ
Property Tax Cap Chapter 97 of the Laws of 2011
• Began with the 2012-‐13 School Year • In effect through 2019-‐20 • Remains +ed to control of residen+al rents and evic+ons (i.e. rent control)
Tax Levy Limit Calcula+on Prior year tax levy
x Tax base growth factor, if any
+ Payments in lieu of taxes receivable during prior year
-‐ Taxes levied for Capital & Tort exclusions during prior year
(not ERS & TRS) =
Adjusted Prior Year Tax Levy x
Allowable levy growth factor (lesser of 2% or CPI) -‐
Payments in lieu of taxes receivable in the coming year +
Available carryover, if any =
“Tax Levy Limit”
Total Levy to Support Proposed Budget
Tax Levy Limit +
Coming school year exclusions =
Maximum Allowable Tax Levy (requiring simple majority)
Prior Year Tax Levy
• Taxes levied in the prior year including exclusions
• For 2016-‐17 school year Ø 2015-‐16 tax levy
(x) Tax Base Growth Factor
• Tax Base Growth Factor = 1 + Quan+ty Change Factor (minimum of 1)
• Quan+ty Change Factor = Percentage by which the full value of the taxable real property in the school district increases due to physical or quan-ty change, compared with the prior year tax roll (growth in full value due to new construc+on, addi+ons and improvements to real property, etc.)
(+) Prior Year PILOTs
• Payments in lieu of taxes (PILOT) owed to the district in the prior school year
• 2016-‐17 school year tax cap calcula+on Ø 2015-‐16 PILOT payments
• Not all districts will have PILOT payments
(-‐) Prior Year Exclusions
• Capital Exclusion + Tax levy necessary to support expenditures resul+ng from the construc+on, acquisi+on, reconstruc+on, rehabilita+on or improvement of school district capital facili+es or capital equipment, including debt service and lease expenditures, and transporta+on capital debt service; net of aid and other applicable revenues (fund balance, Capital Reserve, Debt Service funds)
• Court Orders/Judgments = Tax levy necessary for expenditures resul+ng from court orders or judgments arising out of tort ac+ons for any amount that exceeds 5% of total tax levied in prior school year – (excludes tax cer+oraris, breach of contract)
• Excludes prior year pension exclusion
(=) Adjusted Prior Year Tax Levy
• Prior year levy adjusted for: Ø Tax base growth factor (x) Ø Prior year PILOT (+) Ø Prior year exclusions (-‐)
(x) Allowable Growth Factor
• Allowable Levy Growth Factor = Lesser of: 1.02 OR (1 + Infla+on Factor); Minimum of 1.0
• Infla+on Factor = CPI change, carried out four decimal places
• Source: US Department of Labor
(-‐) PILOTs for Coming Year
• PILOTs to be collected in the coming school year
• For 2016-‐17 school year Ø 2016-‐17 PILOT payments
• Not all districts will have PILOT payments
(+) Available Carryover • Districts may use taxing authority from the prior school year
to increase the subsequent year’s tax levy if taxes were increased in the prior school year by less than the amount allowed by the tax levy limit before exclusions
• Available Carryover = Prior year tax levy limit – prior year tax levy (before exclusions), but no greater than: (1.5% x prior year tax levy limit)
• 152 Districts have available carryover according to Property Tax Report Card data (May 2015)
(=) Tax Levy Limit
• Amount to be calculated and submiied to Comptroller’s Office prior to March 1st of each year
• Prior to addi+on of allowable exclusions
Total Levy to Support Proposed Budget
Tax Levy Limit +
Coming school year exclusions =
Maximum Allowable Tax Levy (requiring simple majority)
Coming School Year Exclusions • Capital Exclusion = Tax levy necessary to support
expenditures resul+ng from the construc+on, acquisi+on, reconstruc+on, rehabilita+on or improvement of school district capital facili+es or capital equipment, including debt service and lease expenditures, transporta+on capital debt service, net of aid and other applicable revenues (fund balance, Capital reserve, Debt Service funds)
• Court Orders/ Judgments = Tax levy necessary for expenditures resul+ng from court orders or judgments arising out of tort ac+ons for any amount that exceeds 5% of total tax levied in prior school year
(excludes tax cer+oraris, breach of contract)
Coming School Year Exclusions • Applies only when ERS and/or TRS employer contribu+on
rates increase by more than 2 percentage points over prior year
• ERS Costs = Tax levy necessary for expenditures for coming school year for employer contribu+ons caused by growth in the system average actuarial contribu+on rate, minus two percentage points Ø Decreasing from 18.2% of salaries to between 15.5-‐15%. No ERS exclusion
• TRS Costs = Tax levy necessary for expenditures for coming school year for employer contribu+ons caused by growth in the normal contribu+on rate, minus two percentage points Ø Decreasing from 13.26% of salaries to between 12-‐11.5%. No TRS exclusion
Tax Cap Calcula+on 2016-‐2017 A. Total Real Property Tax Levy for base year $18,962,486 B. Excess Levy in Reserve 0 C. Tax Levy subtotal( A – B) 18,962,486 D. Tax Base Growth Factor (minimum of 1.0) 1.0082 E. Adjusted Tax Levy subtotal (C x D) 19,117,978 F. Base Year PILOT’s 41,270 G. Base Year Levy plus PILOT’s 19,159,248 H. Base Year Torts and Judgments > 5% 0 I. Base year Capital Expenses Net of Aid 184,900 J. Total base year Torts and Capital Expenses 184,900 K. Levy less base year Torts and Capital (G – J) 18,974,348 L. Allowable Levy Growth Factor lesser of CPI or 2% 1.0073 M. Levy including Levy Growth Factor 19,112,860 N. Budget year PILOT receivables 42,000 O. Levy less budget year PILOT’s (M – N) 19,070,860 P. Eligible Carry Over from base year budget (N/A 2012-‐2013) 0 Q. Tax Levy Limit – before Exclusions (O + P) 19,070,860 0.57% Budget Year Exclusions R. Capital Expenditures net of aid (+ transfer from debt service) 189,625 S. Pension Expenditures above 2% 0 T. Court orders/Judgments in >5% base year levy 0 U. Total Exclusions (R + S + T) 189,625 Total Tax Levy including Exclusions (Q + U) 19,260,485 1.57%
What op+ons does the BOE have? • Op+on 1: Propose a budget requiring a tax levy before
exclusions at or below the Tax Levy Limit prescribed by law Ø Requires a simple majority (50% + 1 voter approval)
• Op+on 2: Propose a budget requiring a tax levy before exclusions above the Tax Levy Limit Ø Requires a “super majority” (60% voter approval) Ø Requires a statement on ballot indica+on the required tax levy before
exclusions exceeds the Tax Levy Limit: “AdopTon of this budget requires a tax levy increase of ____ which exceeds the statutory tax levy increase limit of ___ for this school fiscal year and therefore exceeds the state tax cap and must be approved by sixty percent of the qualified voters present and voTng.”
% Tax Levy Change 2015-‐16 for NYS School Districts
Actual Tax Cap Calcula+ons
• 370 districts had a “cap” GREATER than 2% • 299 districts had a “cap” LESS than 2%
Proposed Budget & Tax Levies for May 2015 Vote
96% of proposed budgets stayed with the “cap” • 395 districts were BELOW their cap • 244 districts were AT their cap • 30 districts were ABOVE their cap & needed 60% approval • 9 budgets were defeated in May vote • 2 budgets were defeated twice – con+ngency budget
What happens if the budget is not approved by the public?
• If the proposed budget is not approved by the required margin: Ø District may resubmit original budget or submit a revised budget to the voters at the
June Revote OR Ø Adopt a con+ngency budget that levies a tax no greater than that of the prior year (0%
increase in tax levy)
• If the resubmiied/revised budget proposal is not approved by the required margin: Ø BOE must adopt a budget that levies a tax no greater than that of the prior year (0%
increase tax levy) and the budget would be subject to con+ngent budget requirements Ø Districts will not be allowed to increase the tax levy to the extent necessary to fund
items of expenditure excluded from the tax cap q No growth factor q No capital, court order/judgments, or pension exclusions
Budget Deadlines/Requirements Remain in Place
• Legal No+ces Ø Due April 2, 2016 Ø Date, +me and place of School Budget Hearing & Annual Budget Vote
• Property Tax Report Card Ø Due April 25, 2016 Ø District tax levy limit Ø Proposed tax levy before exclusions
• Public Hearings and Disclosure Ø May 3 – May 10, 2016
• Budget No+ce Ø District tax levy limit Ø Proposed tax levy before exclusions Ø Budget statement
Budget Development
• Focusing on State Aid Projec+ons Ø Where do projec+ons come from Ø Budge+ng aser State Aid runs
Projec+on Data • Projected Claim Form Data
Ø 3rd column of Form A, FB, FT and ST-‐3 used for state aid projec+ons for: q Governor’s Proposal – January 2016 q Final Aid Projec+ons – April 2016 (State Budget)
Ø Projected data should be as accurate as possible q Over projec+ons in pupil counts & expenditures can cause over-‐es+mated state aid projec+ons
q Under projec+ons in pupil counts & expenditures can cause under es+mated state aid projec+ons
Ø Can be revised any+me during the year via SAMS revision process
State Aid Runs
• Governor’s runs uses November database (October 2015)
• Review year-‐to-‐year changes • Projec+ons based on data submiied by district, BOCES, STAC, BEDS/SIRS data and SED State Aid Unit
• Changes should reflect service changes and/or demographic changes in district
Founda+on Aid and GEA
• Currently unpredictable • Balancing these funding streams will be poli+cal reality
• District pupil counts, demographics and wealth measures play largest role in alloca+ons
BOCES and High Cost Excess Cost Aid
• Projec+ons submiied by home BOCES on behalf of district
• Projec+ons from STAC Unit for both Public and Private Excess Cost
• Uses higher of pupil counts and corresponding costs from past 2 years, if projec+on uses 2-‐year-‐old data, costs are increased by 5%
• Fluctua+ons in student popula+on/services may result in over/under es+ma+ng aid
• Important to review with Spec Ed Office
Instruc+onal Materials Aid
• Textbook, Computer Hardware, Computer Sosware and Library Materials
• Projec+ons uses data submiied by district on ST-‐3 and BEDS/SIRS pupil count data
Transporta+on Aid
• Projec+ons based on data submiied by district on ST-‐3 and Form FT
• Significant changes to expenditures/allowable pupil/miles may result in aid fluctua+ons
• Changes to transporta+on policy, bus routes or re-‐bid transporta+on contracts: district should verify/update projected expenditures
Building Aid
• Projec+on data submiied by State Aid Unit at NYSED
• Based on data submiied by districts on ST-‐3 and SA-‐139
• Delay of Interest Recalibra+on is due to expire – recalibra+on was not on aid runs previously
2016 – 2017
East Aurora School District Challenges
& Funding Opportuni+es
Challenges
• Transporta+on Re-‐Bid $130,000 • BOCES CTE $191,600 • BOCES Special Ed $300,000 • Salaries & Fringe Benefits* $500,000 • Health Insurance $225,000 • Other $200,000
$1,546,000 *(FICA, ERS & TRS)
Funding Opportuni+es • Elimina+on of GEA $700,000 • Breakage from Debt Payoff $200,000 • Reduc+on in Re+rement Contribu+ons $225,000 • Re+rement Incen+ve $200,000 • Tax Levy* $110,000
Total Es+mated Funding Opportuni+es $1,435,000 *Includes Tax Base Growth Factor of 0.66% and 0.73% Levy Growth Factor
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