1 / 29

School Finance

School Finance. Presentation Six. Tax Rate and Tax Rate Apportionment. The local school board sets the district tax rate in line with voter approval and any required reductions or rollbacks. The tax rate may be apportioned (divided) between the four funds.

robert-price
Télécharger la présentation

School Finance

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. School Finance Presentation Six

  2. Tax Rate and Tax Rate Apportionment • The local school board sets the district tax rate in line with voter approval and any required reductions or rollbacks. • The tax rate may be apportioned (divided) between the four funds. • You do not have to have a levy in the special revenue fund. • If you have bonded indebtedness you must have a debt service levy to cover the projected costs.

  3. Apportionment of local taxes • Certain revenues must be allocated to the funds based upon the levy. Specifically, current taxes and delinquent taxes are allocated based upon the levy. • The amount of allocation may be calculated using the direct levy approach or by using a tax rate percentage approach. • The tax rate levy is always expressed as a ratio per $100 of assessed valuation, or by “mill” levy of $1000 of assessed valuation.

  4. Tax Rate Example Value Type Full-Value Taxable Value Land $3,825 $1,275 Improvements $66,066 $22,022 Total $69,891 $23,297 Assessment ratio varies from state to state. Many are assessed at 33.3%.

  5. Tax Rate Percentage TotalTax-RateTax-Amount $23,297 9.102 mills $212.05 $313,500 9.102 mills $2,853.48 (23,297 x 9.102 ÷ 1000 = $212.05) or (23,297 ÷ 1000 x 9.102 = $212.05) (313,500 x 9.102 ÷ 1000 = $2,853.48) or (313,500 ÷ 1000 x 9.102 = $2,853.48)

  6. EAV = Equalized Assessed Valuation Percentage will vary from state to state Value-TypeFull-ValueTaxable Value Land $6,000 $1,200 Improvements $159,000 $31,800 Total $165,000 $33,000 What is the percentage used? 20% If there is a mill levy of 9.102 what would the tax amount be? $300.37

  7. By Dollars Rather Than Mills TotalTax-RateTax-Amount $23,297 $0.9102 $212.05 $313,500 $0.9102 $2,853.48 (23,297 x .9120 ÷ 100 = $212.05) or (23,297 ÷ 100 x .9102 = $212.05) (313,500 x .9102 ÷ 100 = $2,853.48) or (313,500 ÷ 100 x .9102 = $2,853.48)

  8. Local Revenue – Part I • The major source of local revenue is Current Taxes. • A number of factors are involved in projecting the potential local revenue from this source. • Key terms include • Market Value • Assessment Rates • Assessed Valuation • Tax Rate • Collection Rate

  9. Current Taxes • The projection of current tax revenue is determined by multiplying the district’s tax rate times the current assessed valuation divided by 100 times the collection rate or if mills are used, divided by 1000. • The total tax rate consists of the district’s operating levy and the debt service levy.

  10. Operating Levy The Operating Levy is determined by direct action of the Board and by the voters of the district.

  11. Tax Levy Increase Vote • Ballot: • Shall the school board of _____ (name of district) be authorized to increase the operating tax levy for _____ (the purpose or purposes) by ____ (amount of increase) per one hundred dollars of assessed valuation? If this proposition is approved, the adjusted operating levy of the school district is estimated to be ____ (amount) per one hundred dollars of assessed valuation. • What would this ballot read like if we used mills?

  12. Debt Service Levy • Used exclusively to retire the principal and interest on general obligation bonds issued by the school district. • Voters must approve the issuance of the bonds and in doing so they authorize a levy in the debt services fund sufficient to cover the cost of principal, interest, and fees.

  13. Bond Issue Elections (cont) • Ballot wording • Shall the ____ (name of district) Board of Education borrow money in the amount of _____ dollars for the purpose of ______ (specify use of funds) and issue bonds for the payment thereof? • The ballot does not specify a specific tax rate to be levied. This is due to changes in assessed valuation and unknown interest rates until the bonds are sold.

  14. For what purposes can bonds be issued? • Purchasing school house sites and other land for school purposes • Erecting schoolhouses • Furnishing schoolhouses • Building additions to or repairing old buildings • Purchasing school buses and other transportation equipment • Paying off and discharging assessments made by counties, cities, towns, and villages or other political subdivisions or public corporations of the state against the district in connection with infrastructure type items.

  15. Assessed Valuation • The assessed valuation provides the major base used to determine current taxes. • The assessed valuation is a percentage of the true market value of all tangible real and personal property within the school district. • The county assessor is responsible for classifying and determining the market values of all property and applying the appropriate percentages to the property.

  16. Calculating Current Taxes • Estimates of current taxes are derived from three components: • Assessed valuation • Tax rate • Collection rate • Assessed valuation—reported to the school district by the county assessor • Tax rate—set by the board of education each year based on the highest levy approved by the voters.

  17. Current Tax Revenue Formula • (AV/100) X TR X CR = CTR • AV = Total Assessed Valuation of the school district. (Assessed valuation is divided by 100 since property taxes are collected on each one hundred dollars of assessed valuation) • TR = Tax rate approved by the Board of Education • CR – Collection rate based on the average of the previous five years • CTR = Current Projected Tax Revenue

  18. Current Tax Revenue by Fund • By applying the percentage of the total levy per fund to the Current Projected Tax Revenue the revenue by fund may be calculated. • Current taxes must be deposited into each fund in ratio of the levy in that fund to the total tax levy.

  19. Tax Rate Hearing • The Board of Education of every district must hold at least one public tax rate hearing prior to setting the tax rate for the coming year.

  20. When do you receive your current taxes? • Property taxes are payable by December 31. • County Collectors generally distribute current tax revenue during January and February although some counties will distribute current tax revenue in December.

  21. Current Tax Projections • The county clerk must certify the assessed valuation of the school district by July 1. • Your projections will be done well before that date. • You may have a preliminary estimate from the county clerk that will help. This is usually available in March or April • Otherwise, you must project—you can use: • Historical increases over the past five or ten years • The number of building or occupancy permits issued during the previous year

  22. Delinquent Taxes • Taxes paid after December 31 in the year it was levied • Taxes paid under protest are retained until the matter is resolved by the County Board of Equalization or the State Tax Commission. • Best forecast method is to use an average of the past five years less protested taxes.

  23. Delinquent Tax Example Year Del. Taxes Protested Total Received Taxes Del. 1st Prev 75,000 5,000 70,000 2nd Prev 80,000 4,000 76,000 3rd Prev 95,000 8,000 87,000 4th Prev 71,000 5,000 67,000 5th Prev 77,000 4,000 73,000 --Project Delinquent Taxes for budgeting purposes --Apportion to funds based on the tax levy

  24. Delinquent Taxes (continued) • Distributed monthly by the collector • Protested taxes are distributed when the protest is settled or when the district receives judgment from the courts

  25. Earnings on Investments • Investment of surplus funds • Remember cash flow requirements • Investments must be protected by the pledging of securities equal to 100 percent of the invested funds. • There are general guidelines for the types of investments that are legal • You may co-mingle funds for the purposes of investment but the interest must be appropriated to the find in the amount equal to the individual fund’s investment percentage to the total investment.

  26. Food Service • Revenue from the sale of food and snack items usually in the school cafeteria • Placed in the general fund • Is reported as a Proprietary of Enterprise fund. • You can usually use previous year reports to estimated food service revenue. You may need to increase prices. Should not be in a deficit. • Collected on a daily basis.

  27. Student Activities • Receipts collected from various school organizations. • Placed in the General Fund. • Reported as a Fiduciary Fund. • The district acts as a trustee of the funds. • Trustee funds and thus have no significant effect on the district’s budget. • Project using the current ending balance.

  28. Community Services • Revenue collected for district programs or services not directly related to the student instructional program. • Summer camps, recreational programs, etc. • The source will usually be user fees. • Placed in the funds according to anticipated expenditures.

  29. Other Local Revenue • Receipts from a variety of minor sources not easily identifiable within a specific classification. • Rental fees, sale of surplus property, etc. • Placed in the general fund unless a specific donation would necessitate deposit to another fund. • Project using current year actual revenue.

More Related