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Clerk-Treasurer’s Conference

Clerk-Treasurer’s Conference. Department of Local Government Finance Dan Jones, Assistant Director, Budget Division October 2011. Topics. Transparency & Streamlining Status of 2012 Budget Budget Submission, Review and Adoption Budget Forms and Gateway Maximum Levies Year End Reminders.

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Clerk-Treasurer’s Conference

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  1. Clerk-Treasurer’s Conference Department of Local Government Finance Dan Jones, Assistant Director, Budget Division October 2011

  2. Topics • Transparency & Streamlining • Status of 2012 Budget • Budget Submission, Review and Adoption • Budget Forms and Gateway • Maximum Levies • Year End Reminders

  3. Transparency & Streamlining • Transparency is a concept of providing access to information in formats designed to give taxpayers a look into taxes, spending and operations. It is designed to bring better visibility, openness & accountability to local government. • Streamlining is a process of eliminating duplicative or unnecessary steps and process improvement. • Both concepts are the focus of DLGF’s current and future initiatives.

  4. Status of 2012 Budget • 16 counties certified net assessed values (NAV’s) by August 1st deadline compared to 9 last year. • Last year DLGF issued 86 Budget Orders by the Feb 15th deadline. • Last year 90 counties had “on time” property tax bills. • Goal this year is for 91 counties to be “on time.” • Reassessment is scheduled for completion March 1, 2012 for taxes payable in 2013.

  5. Budget Submission • All units that intend to levy a property tax (except counties and schools) are to submit the proposed budget, tax rates and levies to the county council for a budget recommendation. • “Non binding” recommendation for units with elected fiscal body and submitted to council at least 45 days before adoption meeting. • Council makes a recommendation at least 15 days before adoption meeting. • “Binding” recommendation (adoption) is for units with an appointed fiscal body or as required by statute. • IC 6-1.1-17-3.5

  6. Budget Recommendations • IC 6-1.1-17-20 requires solid waste districts, conservancy districts (with appointed boards), fire protection districts, and other “non-elected” boards (when budget increases more than the AVGQ) to submit budgets for adoption by county or city fiscal body. • Submission to council is at least 30 days before adoption meeting. • Failure to comply results in a frozen budget and levy for ensuing year.

  7. Budget Recommendations • A county council shall complete the review at least 15 days before the civil taxing unit fixes the budget, rate, and levy. (IC 6-1.1-17-3.5) • The recommendation must include a comparison of any increase in the budget, rate or levy to: • Average increase in Indiana nonfarm personal income to the preceding six years and average increase in nonfarm personal income for the county over the last six years and; • Increases in the budgets and levies of other civil taxing units in the county. These are the minimum requirements for county councils.

  8. Budget Forms • Previously, each type of local government had a similar but unique set of budget forms. • Some units had special forms only used by their form of government • All the forms were unique for each type of government, they all had the same purpose and function. • A goal for 2012 was to consolidate (or streamline) those forms into one set that could be used for all units (except schools). • This would also help taxpayers learn the budget process (transparency).

  9. Budget Forms • Budget forms this year are required to be submitted to DLGF through Gateway. • After each form is completed, click “Ready to Submit.” • Before submitting, check that the proper number of forms have been completed as listed on the Accordion. • All forms of the same number are submitted as a group. For example, all Form 1’s are submitted together. • Units must still provide the DLGF with a copy of the Proof of Publication of the notice and also the signed form 4 by either PDF (preferred), fax, or mail.

  10. Budget Submission & Gateway If you are ready to submit your budget forms, go through this checklist to avoid common submission mistakes: • Did I fill in the adopted columns of Forms 1, 4a, and 4b? • Did I put my electronic signature on each form? • Did I mark each form “ready to submit”? • Has the county council held the non-binding review of my budget? • Has my adoption meeting already been held? If you answer no to any of these questions, you are not yet ready to submit the forms.

  11. Budget Submission & Gateway Form 4 is the formal, official budget adoption form. • Form 4 has the total budget, property tax levy and rates for all adopted funds and is signed by the fiscal body. • Many units have not completed the adopted columns of forms 4a and 4b before submitting the budget. Therefore, Form 4 lists a budget, rate and levy of 0’s as the adopted values. • Prior to submitting the Form 4, either copy the advertised amount column to the adopted column or directly enter the adopted values in the adopted column • It is allowed to print the Form 4 with zero values and write in the amounts prior to signing.

  12. DLGF’s Review of the Budget • DLGF begins reviewing budgets in order based on when NAVs were submitted and all units of the county have submitted their budget forms on Gateway. • DLGF will schedule a public hearing through the county auditor’s office. The hearing will cover all budgets of all units in the county. • DLGF will issue a “1782 Notice” to each unit notifying the unit of actions taken by the DLGF. Units have 10 days to respond to the “1782.” A prompt response helps county receive property tax rates earlier. • DLGF issues the Budget Order by Feb 15th, certifying the appropriations, property tax levy and rate for each civil taxing unit and each fund.

  13. Most Common Reasons Budgets or Levies are Denied 1. Budget was not advertised by Sept. 2nd and 9th 2. Budget was not submitted for “Recommendation” 3. Fiscal body did not adopt by Nov. 1 4. Less than 10 days between public hearing and adoption meeting 5. Budget adopted before receiving “recommendation” and before 45 days had passed 6. Annual report and annual compensation report not filed with State Board of Accounts (new this year)

  14. Budget or Levy Denial: • If the previously discussed conditions were not satisfied: Both the budget and property tax levies are frozen at previous years level • Unit will not realize the AVGQ growth in the levy • Budgets, levies, and rates may decrease but cannot increase • Frozen levy may impact future years distribution of income taxes • These situations are not a basis for excessive levy appeals • Appropriations may be increased with approval of an additional appropriation within available fund balances except when denial is due to not filing of TA-7, 100R or annual report with the State Board of Accounts. • Fourth Level

  15. Maximum Levy Changes • Elimination of “Use it or Lose it” provision – HEA 1288 • Units no longer lose max levy by not levying up to the maximum • Max levy calculation is to apply AVGQ to last year’s max levy • HEA 1004 adjustments: • Annexation appeal is percent of increase in AV due to annexation up to 15% or • The amount of the excess levy appeal awarded as a result of the annexation • No unit should have a max levy lower than 2011 max levy • If they do, the DLGF may grant a permanent adjustment to the max levy in an amount less than or equal to the difference • An appeal for this adjustment is by following procedure for other max levy appeals (for 2012 only) • Second Level • Third Level • Fourth Level

  16. Circuit Breakers • A unit may now transfer (instead of appropriate, as was previously required) money from a fund to a debt service fund if the debt service funds has been negatively affected by circuit breaker credits. • Requires passage of ordinance or resolution. IC 6-3.5-8-5.1 (HEA 1275) • Revenues for referendum funds, Lake and St. Joe counties debt funds, are exempt from circuit breaker credits. Property tax will be distributed to those funds with no cap impact. Caps will reduce the distribution to the “non-exempt” funds. • IC 6-1.1-20.6-9.8 (HEA • Third Level • Fourth Level

  17. Year End Reminders • November 1 is deadline to adopt budgets, rates, and levies and LOIT (Local Option Income Taxes) ordinances. • Respond promptly to the 1782 Notice. • Review the 1782 Notices CAREFULLY!!! • Budgets or additional appropriations cannot be approved if 2010 CTAR or 100R has not been filed with SBOA. • Post Bond Sale Report filed with DLGF by December 1st • Submit all additional appropriation requests to DLGF by Dec. 15th • Possible payroll changes related to FICA. • Reassessment is scheduled for completion on March 1 of 2012 for taxes payable in 2013. Remember: Reassessments are revenue neutral in Indiana

  18. Contact the Department • Dan Jones • Telephone: 317.232.0651 • Fax: 317.232.8779 • E-mail: djones@dlgf.in.gov • Web site: www.in.gov/dlgf • “Contact Us”: www.in.gov/dlgf/2338.htm

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