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Understanding the Tax Calculation

Understanding the Tax Calculation. Teddy Dumlao. What is the relationship between tax rates and tax amounts? What governing board decisions and bond/override election results affect taxes and per pupil funding?

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Understanding the Tax Calculation

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  1. Understanding the Tax Calculation Teddy Dumlao

  2. What is the relationship between tax rates and tax amounts? • What governing board decisions and bond/override election results affect taxes and per pupil funding? • If the board adopted a budget lower than the budget limit to maintain the current primary tax rate, how would that impact my property tax bill and the school district? Key Questions

  3. Income & Sales Tax Sales Tax Initiative Education Property Tax - Secondary Property Tax - Primary

  4. Disparity of tax rates to support education • Heavily reliant on property taxes • Disparity of Funding Gilbert Property Taxes $ per Student Roosevelt Property Taxes $ per Student Scottsdale Problems with Old Model Property Taxes $ per Student

  5. Equalize Tax Rates • Decrease reliance on property taxes • Equalize per-pupil spending • “… a general and uniform public school system…” 1980 Tax Reforms

  6. Property Values and the Levy

  7. Qualifying Tax Rate

  8. Full Cash Value (FCV) is a reflection of the market value of your property and consists of land and improvements. • Tax year reflects the year the tax bill is calculated and mailed but is based on market conditions of January the previous year. • 2014 Gilbert Median Value increased to $159,000 (That is good news!) Full Cash Value

  9. Total Cash Requirements

  10. $361.35 $445.75 $807.10 Gilbert Unified Property Taxes

  11. $360.75 $(0.60) $373.98 $(71.77) $734.73 $(72.37) Gilbert Unified Property Taxes

  12. Gilbert Median Home 2012 2013 2014 $143,300 4.0884 $361.35 $136,100 4.3518 $360.75 $159,000 3.8692 $360.75 Primary Tax Rate and Amount

  13. Number of Students (Average Daily Membership) • Weighted to address higher needs like disabilities • Teacher Experience Index • Transportation Miles Equalization Base

  14. Equalization Base • Equitable funding • Qualifying Levy • Portion of the equalization that comes from Local Property taxes as opposed to state funds. • The local effort expected to provide equitable student funding for your district • Equalization Assistance • The state revenue calculation to provide equitable student funding for your district Equalization Base Qualifying Levy Equalization Assistance Equalization Assistance

  15. Equalization Assistance Gilbert Qualifying Levy Property Taxes $ per Student Equalization Assistance Roosevelt Qualifying Levy Property Taxes Cave Creek Scottsdale $ per Student Qualifying Levy Qualifying Levy Property Taxes Min QTR Equalization Base $ per Student

  16. Rate: 4.3518 Amount: $360.75 Total Savings: 5 cents / month Gilbert Equalization Assistance Qualifying Levy Property Taxes $ per Student Budget Limit Budget Limit vs. Adopted Limit

  17. Rate: 4.0884 Amount: $324.90 Total Savings: $3.04/ month Gilbert Equalization Assistance Qualifying Levy $5.5M Property Taxes $ per Student Additional Cuts Adopted Limit Budget Limit vs. Adopted Limit

  18. $ per Student Higley $ per Student Mesa $ per Student Chandler $ per Student Gilbert Per Pupil Funding

  19. Primary Gilbert Property Taxes Equalization Assistance M&O Override M&O Override Bonds Capital Overrides Capital Overrides $ per Student $(0.60) $(71.77) Secondary Secondary Taxes

  20. Primary Gilbert $5.5M Property Taxes Equalization Assistance M&O Override M&O Override Bonds Capital Overrides Capital Overrides $ per Student $(0.60) $(71.77) $(36.45) Reducing the limit to keep the rate the same will lower the bill by an additional $36 for the year or $3/month Secondary Primary Tax Amount vs Tax Rate

  21. $ per Student Higley $ per Student Mesa $ per Student Chandler $ per Student Gilbert Governing Board Budget Adoption Voter Approval Per Pupil Funding

  22. County Portion of Equalization Assistance Primary and Secondary Taxes Homeowner’s Rebate Your Tax Bill

  23. Tax Comparison Worksheet

  24. Since the Qualifying Tax Rate fluctuates in response to changes in property value, a Primary Tax Rate increase does NOT necessarily mean a Primary Tax Amount increase to support basic M&O K-12 funding. Key Points

  25. The governing board may adopt the formula based budget limit or a lesser amount to reduce the primary taxes and per pupil funding. • Bond and Override election results determine the amount of additional funding beyond the formula that may be levied to increase per pupil funding for the district. Chandler $ per Student Gilbert $ per Student Key Points

  26. The expiration of a capital override and the phasing out of the M&O override will result in an annual property tax bill reduction of $72 for a median home in Gilbert for the 2013 tax year. $(72) Key Points

  27. Adopting a budget below the formula limit for the sake of maintaining the current primary tax rate will further reduce the property bill by… • an additional $36 for the year or • an additional $3 per month • and will reduce the district revenue by $5.5M $(72) $5.5M $(36) Gilbert $ per Student $3 a month = $5.5M Key Points

  28. Questions? Answers !

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