Presentation on theme: "St. Michael-Albertville Independent School District #885 Truth in Taxation Hearing for Taxes Payable in 2013."— Presentation transcript:
St. Michael-Albertville Independent School District #885 Truth in Taxation Hearing for Taxes Payable in 2013
Truth in Taxation Law State law initially approved in 1988 The 2009 legislature made several changes: Property tax hearing can now be held at regular meeting. Hearing must be at 6:00 PM or later. Levy may be adopted at same meeting. Requirement to publish meeting notice was deleted. All school districts must now hold a hearing. Previously some districts were exempted from the requirement to hold a hearing.
Tax Hearing Presentation State law requires that we present information on the current year budget and actual revenue and expenses for the prior year State law also requires that we present information on the proposed property tax levy, including: The percentage increase over the prior year Specific purposes and reasons for which taxes are being increased District must also allow for public comments
Agenda for Hearing A.Background on School Funding, Property Tax Levies, and Budgets B.Information on District Budget C.Information on the District’s Proposed Tax Levy for Taxes Payable in 2013 D.Public Comments and Questions
State of MN Constitution “ARTICLE XIII MISCELLANEOUS SUBJECTS Section 1. UNIFORM SYSTEM OF PUBLIC SCHOOLS. The stability of a republican form of government depending mainly upon the intelligence of the people, it is the duty of the legislature to establish a general and uniform system of public schools. The legislature shall make such provisions by taxation or otherwise as will secure a thorough and efficient system of public schools throughout the state.”
As a result… School District Revenues and Taxes Are Highly Regulated by the State State sets formulas which determine revenue; most revenue is based on specified amounts per pupil State sets tax policy for local schools State sets maximum authorized property tax levy (districts can levy less but not more than amount authorized by state, unless approved by the voters) State authorizes school board to submit referendums for operating and capital needs to voters for approval
State Funding for Schools Has Not Kept Pace with Inflation Increases in basic general education revenue per pupil have been less than inflation Per-pupil revenue for fiscal year 2012-13 is $426 below the 2002-03 CPI inflation adjusted amount and $859 below IPD inflation adjusted amount Per-pupil funding increased $50 for fiscal 2012 and $50 for fiscal 2013.
STMA general education revenue per student is $5,631, ranking 336 out of 338
State Share of Revenue for Major Equalized Levies Source: MDE
15 School Shift Summary February 2012 Forecast Aid Payment Shift @ 64.3 – 35.7 (vs 90-10)$1.873 Billion Property Tax Shift (@ 48.6% of Gross Levy) $563 Million _____________ Total School Shift (as of 6/30/2013)$2.436 Billion
Contrast of City/County to School District Levy Cycle City/County - Budget Year is same as calendar year. The 2012 taxes provide revenue for the calendar year 2012 budget. Schools - Budget year begins July 1 st and coincides with school year. The 2013 taxes provide revenue for the 2013-2014 school fiscal year. Budget will be adopted in June 2013.
Change in Tax Levy Does not Determine Change in Budget Tax levy is based on many state-determined formulas Some increases in tax levies are revenue neutral, offset by reductions in state aid Expenditure budget is limited by state-set revenue formulas, voter-approved levies, and fund balance, not just by tax levies
Budget Information Because approval of the budget lags certification of the tax levy by six months, the state requires only current year budget information and prior year actual financial results to be presented at this hearing.
Budget Information All school districts’ budgets are divided into separate funds, based on purposes of revenue, as required by law For our district, 6 funds: General Food Service Community Service Building Construction Debt Service Trust
FUND 2011-12 Actual Revenues and Transfers In 2011-12 Actual Expenditures and Transfers Out June 30, 2012 Actual Fund Balance 2012-13 Budget Revenues and Transfers In 2012-13 Budget Expenditures and Transfers Out June 30, 2013 Projected Fund Balance General Fund/Restricted $3,153,043$3,836,692$1,887,074$2,073,007$2,095,099$1,864,982 General Fund/Unrestricted $40,303,517$39,074,758$6,654,386$42,484,086$41,884,102$7,254,370 Food Service$2,358,078$2,140,188$1,468,961$2,382,273$2,310,075$1,541,159 Community Service Fund $4,506,902$4,167,170$775,253$4,326,796$4,189,053$912,996 Building Construction Fund $47,536$871,949$137,823$100$250,786($112,863) Debt Service Fund$24,975,940$68,762,600$3,034,140$13,336,105$12,795,585$3,574,660 Trust Fund$21,517$15,450$34,667$16,100$18,050$32,717 Internal Service$0 Total – All Funds$75,366,533$118,868,807$13,992,304$64,618,467$63,542,750$15,068,021 St. Michael-Albertville School District No. 885 District Revenues and Expenditures Actual for FY 2012, Budget for FY 2013
Revenue - All Funds $64,618,467 2012-2013 Budget General, $44,557,093 69.0% Trust, $16,100 0.0% Debt Service, $13,336,105 20.6% Building Const., $100, 0.0% Community Service, $4,326,796 6.7% Food Service, $2,382,273 3.7%
General Fund Budget Highlights 2012-2013 General Fund Budget $44,557,093 Revenues by Major Source Federal $119,855 0.3% Other $723,867 1.6% Property Tax Levies $3,781,571 8.5% State Aid $39,932,517 89.6% 2011-12 Federal $730,560 State $37,172,449 Levies $3,554,745
General Fund Budget Highlights 2012-2013 General Fund Budget Expenditures by Program Area - Budget $43,979,201 Regular Instruction $23,398,970 53.2% Vocational Instruction $755,370 1.7% Special Educ. Instruction $4,711,876 10.7% Instructional Support $3,905,798 8.9% District & School Admin. $1,517,709 3.5% Dist. Support Services $889,866 2.0% Pupil Support $3,009,874 6.9% Other $190,000 0.4% Sites and Buildings $5,599,738 12.7%
General Fund Budget Highlights 2012-2013 General Fund Budget Expenditures by Object Category $43,979,201 Purchased Services, $6,044,341 13.7% Capital Expenditures, $1,224,6387 2.8% Supplies and Materials, $2,063,025 4.7% Other, $115,762 0.3% Employee Benefits $8,434,811 19.2% Salaries and Wages, $26,096,624 59.3%
Proposed 2013 Property Tax Levy Determination of levy Comparison 2012 to 2013 levies Specific reasons for changes in tax levy Impact on taxpayers
Property Tax Background Every owner of taxable property pays property taxes for the various “taxing jurisdictions” (county, city or township, school district, special districts) in which the property is located Each taxing jurisdiction sets its own tax levy, often based on limits in state law County sends out bills, collects taxes from property owners, and distributes funds back to other taxing jurisdictions
School District Property Taxes Each school district may levy taxes in up to 30 different categories “Levy limits” (maximum levy amounts) for each category are set either by: State law, or Voter approval Minnesota Department of Education (MDE) calculates detailed levy limits for each district
Property Tax Background School District Property Taxes Key steps in the process are summarized on the next slide Any of these steps may affect the taxes on a parcel of property, but the district has control over only 1 of the 7 steps
Minnesota School District Property Taxes - Key Steps in the Process Step 1. The City or County Assessor determines the estimated market value for each parcel of property in the county. Step 4. The Legislature sets the formulas which determine school district levy limits. These are the maximum amounts of taxes that school districts can levy in every category. Step 2. The Legislature sets the formulas for tax capacity. (E.g., for homestead residential property, tax capacity = 1% of first $500,000 in value + 1.25% of value over $500,000.) These formulas determine how much of the tax burden will fall on different types of property. Step 5. The Minnesota Department of Education calculates detailed levy limits for each school district, based on the formulas approved by the Legislature in step 4. These limits tell districts the exact amounts that can be levied in every category. Step 6. The School Board adopts a proposed levy in September, based on the limits set in step 5. After a public hearing, the board adopts a final levy in December. Final levy cannot be more than the preliminary levy, except for amounts approved by voters. Step 3. The County Auditor calculates the tax capacity for each parcel of property in the county (based on values from step 1 and tax capacity formulas from step 2), as well as the total tax capacity for each school district. Step 7. The County Auditor divides the final levy (determined by the school board in step 6) by the district's total tax capacity (determined in step 3) to determine the tax rate needed to raise the proper levy amount. The auditor multiplies this tax rate times each property's tax capacity, to determine the school tax for that property.* * For certain levy categories (referendum, equity and transition levies), tax rates and levy amounts are based on referendum market value, rather than tax capacity.
Proposed Levy Payable in 2012 Schedule of events in approval of district’s 2012 (Payable 2013) tax levy September 12 – Dept. of Education prepared and distributed first draft of levy limit worksheets setting maximum authorized levy Sept 17: School board approved proposed levy amounts Mid-November: County mailed “Proposed Property Tax Statements” to all property owners December 3: Public hearing on proposed levy at regular meeting Following hearing school board will certify final levy amounts
Overview of Proposed Levy Payable in 2013 The total proposed levy for 2013 is lower than the 2012 levy by $176,261, or 1.52% Law requires that we explain the reasons for the major changes in the levy
Explanation of Levy Changes Category: Voter Approved Referendum Change: -$91,387 Use of funds: general operating expenses Reason for decrease : Referendum Revenue is based upon the voter approved per pupil amount multiplied times resident pupil units. For taxes payable in 2013 resident pupil units were estimated to slightly decrease (open enrollment and tuition in students not included) Referendum Aid (state equalization) will increase
Explanation of Levy Changes Category: Operating Capital Levy Change: -$7,664) Use of funds: Equipment, Technology, Software, Textbooks Reason for decrease: Adjusted cost pupil unit increased (all students) Operating Capital Aid (state equalization) will increase
Explanation of Levy Changes Category: Equity and Safe Schools Change: +$3,615 and $5,068 Use of funds: Equity for general fund use and Safe Schools for SRO’s, counselors, social workers, nurses, psychologists, drug and suicide prevention programs Reason for increase: Based upon $46 and $30 multiplied by adjusted cost pupil unit; pupil units are expected to increase by approximately 170, leading to an increase in revenue
Explanation of Levy Changes Category: Health and Safety Change: +$70,301 Use of funds: Building and grounds maintenance and repair for health and safety Reason for increase: Approval of projects by state Prior year’s request was lower than usual
Explanation of Levy Changes Category: School-Age Child Care Change: +$15,000 Use of funds: Children who require extra staff support in the Kids Play program Reason for increase: Increased costs associated with serving students requiring extra staff support
Explanation of Levy Changes Category: Community Service Adjustments from Prior Years Change: +$11,342 Use of funds: Children who require extra staff support in the Kids Play program Reason for increase: Under reported costs in prior years associated with serving students requiring extra staff support
Explanation of Levy Changes Category: Debt Service Change: +$243,966 Use of funds: Payment of voter approved bonds for buildings Reason for increase: Increase required to service bond repayment
Explanation of Levy Changes Category: Adjustment for Prior Year Debt Service Change: -$398,367 Use of funds: Payment of voter approved bonds for buildings Reason for decrease: Repayment of capital loan no longer required levy for debt excess repayment