Property Tax Revenue Cap - Long Beach Public Schools

Property Tax Revenue Cap
•  Board of Education
Work Session
•  October 25, 2011
Current Tax Levy
$88,965,564
Current Total Budget
$118,641,564
Tax Levy and Budget Summary
2010-2011
Tax Levy
2011-2012
Tax Levy
Difference
Tax
Levy
%Δ
$88,965,564
$88,965,564
$0
0%
2010-2011
Total Budget
2011-2012
Total Budget
Difference
Budget
%Δ
$116,471,564
$118,641,564
$2,170,000 1.86%
Budget Increase
2010-2011
Operating Budget (w/
out Serial Bond
Interest)
2011-2012
Operating Budget (w/
out Serial Bond
Interest)
$
Difference
Budget
%Δ
$116,471,564
$116,471,564
$0
0%
Function
Code
Function
Name
2010-2011
Budget
2011-2012
Budget
9711.700
Serial Bond Interest
$0
$2,170,000
2011 -2012 Revenue Projection
Revenue
Categories
State Aid
$15,816,285
Other Revenue
$6,901,607
Appropriated
Fund Balance
$2,995,000
Tax Levy
$88,965,564
ERS Reserve
Fund
Worker’s Comp
Reserve Fund
EBAL Reserve
Fund
$2,490,500
$511,939
$960,669
$3,963,108
Revenue Projections
% Change
Revenue
Categories
2010-2011
2011-2012
State Aid
$18,640,593
$15,816,285
-15.15%
Other Revenue
$5,870,407
$6,901,607
17.57%
Appropriated
Fund Balance
$2,995,000
$2,995,000
0%
Tax Levy
$88,965,564
$88,965,564
0%
ERS Reserve
Fund
$0
$2,490,500
Worker’s Comp
Reserve Fund
$0
$511,939
EBAL Reserve
Fund
$0
$960,669
2010- 2011 and 2011-2012
Revenue Sources
State
StateAid
Aid
Other
OtherRevnue
Revenue
Appropriated
AppropriatedFund
FundBalance
Balance
Tax
TaxLevy
Levy
Reserve Funds
Property Tax Levy Cap
•  Passed in June 2011
•  New allowable limits or thresholds begin
with the 2012-13 school year, and are in
effect through at least 2016-17
•  Legislation is tied to the continuation of
rent control
Property Tax Levy Cap
•  Not really a hard cap or a flat 2% limit
•  Prescribes the amount that a school district
can raise through the tax levy, not the level
or increase for an individual taxpayer
•  Allows school districts to exceed the
formula limit if the local community passes
the proposed school district budget by at
least a 60% margin
2% Formula
•  Simple Majority Vote
•  Formula
–  Prior fiscal year tax levy
–  Growth factors
–  Exemptions
•  Adjustments due to increases in the pension systems greater
than two percentage point increases
•  Court orders or judgments for an amount that exceeds 5% of
the total tax levied in the prior school year
•  Capital expenditures (including bond debt service)
Exceeding the Limit
•  Requires a supermajority vote (>60%)
•  If a proposed school district tax levy exceeds the
tax levy limit, the ballot shall include the following
substantially similar statement:
–  Adoption of this budget requires a tax levy limit
increase of _________ which exceeds the statutory
tax levy limit of _______ for this fiscal year and
therefore exceeds the state tax cap and must be
approved by sixty percent of the qualified voters
present and voting
If the proposed budget fails…
•  A school district can resubmit the original
budget or submit a revised budget for
another vote, or adopt a contingency
budget with a tax levy no greater than that
of the prior year
•  If the second budget attempt fails, the
Board of Education must adopt a budget
that has no tax levy increase
Other Key Legislative Elements
•  Available carryover
•  Adjustments for transfer of local
government functions
•  Building aid is subtracted from capital debt
service exclusion
•  Proposed tax levy must be filed by March
1st
Projected Allowable Tax Levy
•  $88,965,564 = current year tax levy
•  Multiply by tax base growth factor, add $250,000 PILOT, multiply by
levy growth factor (CPI or 2%), subtract $250,000 PILOT
•  $91,176,322 = tax levy limit before exclusions (2.49%)
•  Add approx $350,000 for ERS and TRS expenditures (estimated
amount above two percentage point growth)
•  Add approx $5,616,675 for capital projects debt service
•  Subtract approx $2,200,000 in anticipated building aid
•  Limit for simple majority vote
7 Year Budget and Tax Levy Trend
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
BGT
AMT
$
$97,681,755
$102,734,004
$107,706,742
$112,639,710
$114,644,697
$116,471,564
$118,641,564
BGT
%
∆
6.22%
5.14%
4.84%
4.58%
1.78%
1.59%
1.86%
Tax
Levy
%
∆
9.90%
5.17%
4.98%
4.86%
2.57%
1.93%
0%
Multi-Year Financial Planning Results
•  Creation of a fund balance
–  Undesignated fund balance to 4% limit
–  Designated reserve funds
•  Right-Sizing the budget
–  Streamlining budget codes based on need
–  Optimizing resources, including staff
consolidation
•  0% levy growth in for 2011-2012
–  One of the lowest on Long Island
Understanding
your
Statement of
School Taxes
•  Total Tax
•  Total Tax Levied
•  Taxable Value
•  Tax Rate
•  Uniform % of Value
•  Full Value
•  Basic STAR
Total Tax Amount
•  Total Tax is the amount
paid by the taxpayer to
support the operation of
the school district and
the library
•  Taxpayers can benefit
from a slight reduction in
the amount due for early
payment of the Total Tax
Total Tax Levied
• 
• 
Total Tax Levied is the
amount of the School
District Tax Levy + Library
Tax Levy – STAR payment
+ Restored Taxes
School District Tax Levy =
$88,965,564
Changes from 2010-211 to 2011-2012
RIAN BOPER
ROY ROGERS WAY
LONG BEACH, NY 11561
RIAN BOPER
ROY ROGERS WAY
LONG BEACH, NY 11561
•  Tax Rate: Even though
Class 2 rate increased, the
amount of tax from Class 2
decreased because the ABP
for Class 2 declined from
18.69607% to 18.66069%
•  Total Tax Levy: 0% change
from prior year
•  STAR: deduction is shown
after the tax amount is
calculated, but the new
STAR cap limits the benefit
and shifts more of a burden
on the taxpayer
Taxable Value
•  The Taxable Value is the
portion of the assessed
value used to calculate the
Total Amount
•  The Taxable Value is the
assessed value minus the
value of the Basic STAR
6 Year Adjusted Base Proportions
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
Class 1
58.05186% 58.79098%
59.21786%
59.62141%
60.41998% 61.28002%
Class 2
20.08462% 20.03620%
19.35214%
19.24497%
18.69607% 18.66069%
Class 3
9.87137% 10.55859%
10.73085%
10.00006%
Class 4
11.99215% 10.61423%
10.69915%
11.13356%
9.66817%
9.32156%
11.21578% 10.73773%
6 Year Adjusted Base Proportions
2010-2011
2011-2012
Taxable
Assessed
Value
Share of
Levy
12,916,481
53,752,976
416.158
Class 2
6,087,605
16,633,064
Class 3
1,184,164
Class 4
Class 1
Total
Tax Rate
Taxable
Assessed
Value
Share of
Levy
Tax
Rate
%
Change in
Tax Rate
12,233,769
54,518,115
445.636
7.083%
273.228
5,656,277
16,601,588
293.507
7.422%
8,601,342
726.364
1,329,417
8,292,978
623.806
-14.119%
3,294,037
9,978,182
302.917
2,937,846
9,552,883
325.166
7.345%
23,482,287
88,965,564
22,157,309
88,965,564
Tax Rate
•  Divide the Class 1 proportionate
share of the tax levy by the
proportionate share of assessed
value [$53,752,976 / $12,916,481 =
$4.16158], then multiply by $100 =
$416.158
•  Shift of ABP from 59.62% to
60.42%
•  The shift in the burden on the
Class 1 taxpayers caused the tax
rate to increase by 18.88% even
though the tax levy only increased
by 1.93%
STAR Program
•  STAR is a program that
benefits taxpayers by
reducing the Tax Amount
•  The School District receives
the same value of the
reduction in Tax Amount in the
form of our state STAR
program
Next Steps
•  Obtain more detailed information about how to
use the 2% formula
•  Board will convene a Budget Advisory
Committee
•  Begin the budget process with the limits in mind
•  Assess district needs
•  Partner with the community to distribute accurate
information
•  Lobby for our fair share of state aid