Slide 1

2012-2013 Property Tax Levy Slide 2 Key Tax Levy Components The Board of Education must set the FY 2012-2013 tax levy no later than November 1, 2012 The tax levy must be delivered to the clerk of each municipality no later than November 10, 2012 (new law, used to be November 6 th ) School districts levy taxes for general operations, debt service, capital expansion, and community service KASD will levy 2012-13 taxes for all of the above less capital expansion Property values are equalized to reflect market value rather than local assessed value Slide 3 KASD Tax Levy Categories General Operations General operations not funded through state aid or local sources are levied for by KASD Accounts for about 85% of the overall tax levy Debt Service Referendum and non-referendum approved debt Referendum approved debt for KASD is Kaukauna High School; non- referendum approved debt service is for the payoff of the Wisconsin Retirement System loan KHS debt service sunsets 9/1/2017; WRS debt service is complete 9/1/2020 Community Service A direct tax for services provided by KASD that are community based KASD Fund 80 levy is for a portion of the police liaison officers and part of the activities department Slide 4 Development of the Tax Levy All Wisconsin public school districts use the same formulas in the development of the tax levy Laws regarding maximum taxation by school districts were set in 1993 Key components to the tax levy Pupil count Equalized aid Property valuation Debt service State imposed revenue limit Slide 5 Pupil Count Third Friday count KASD will certify its FY 2012-13 pupil count on September 21, 2012 Final work is being on done to verify open enrollment students which will yield the full time equivalent pupil count KASD budgeted 500 students leaving under the open enrollment plan for FY 2012-2013; 60 students coming into the District 462 left KASD under open enrollment in 2011-2012; 53 entered the system For budgetary purposes and to create a revenue limit 40 students were added to the 2011-2012 FTE for 2012-2013 Slide 6 Pupil Count History Pupil count FTE is shown and includes school year and summer school combined District has shown a slow but steady increase over the past decade in FTE FTE does not dictate the number of students being educated by KASD due to open enrollment Slide 7 Equalization Aid Equalization aid drives the revenue limit and subsequently the tax levy In the past equalization aid equated to 2/3 funding by the State of Wisconsin this is no longer the case The revenue limit less equalization aid yields the general operating tax levy for a district Key equalization aid components Full time equivalency in September, January Total Fund 10 expenditures from the previous year Total Fund 10 revenues from the previous year Debt service cost from the previous year Property valuation as certified the previous May Slide 8 Slide 9 Equalization Aid History Why the decrease? Deductible receipts are down $267,236 from 10-11 to 11-12 Operating expenses down $3,721,940 10-11 to 11-12 Debt service cost down $662,857 Shared cost dropped by $4,384,797 from 10-11 to 11- 12 Yields secondary aid down $827,946 and no tertiary aid due to being a low spending district Slide 10 Equalization Aid History Equalization aid 10-year history for KASD along with the projected 2012-13 aid is shown below: Slide 11 Debt Service Fund 38 (non-referendum debt) 2012-13 tax levy is $296,312 Tax levy for WRS payoff is complete in 2020; current principal balance owed is $2,080,000 These funds are part of the revenue limit for the district and, technically, have no adverse effect on the tax levy Upon payoff completion this money will be used for general operations Fund 39 (referendum debt) 2012-13 tax levy is $2,518,499 or 13.5% of the total levy Tax levy is for Kaukauna High School; payoff of $11,730,000 principal is slated for 2017 Fund 39 debt service is a direct tax; upon final payment and without another referendum KASD will reduce the tax levy by approximately $2.5 million per year Slide 12 Equalized Valuation Equalized valuation is a factor in the tax levy in the following ways: Equalized property value sets the final primary, secondary, and tertiary equalization aid number Equalized property value is the denominator in figuring out mill rate (amount taxed per $1,000 of equalized valuation) For example, KASD taxed $16,210,408 in FY 2011-12 with and equalized value of $1,843,177,117 $16,210,408/$1,843,177,117 = 0.00879 per $1.00 of property value KASD levied $8.79 per $1,000 of property value in FY 2011- 12 Slide 13 2011-2012 Equalized Values Slide 14 Projected Equalized Valuation DPI/Department of Revenue Certification DPI and the Department of Revenue post final equalized values on October 15 th The tax levy can then be finalized using the data Projecting equalized value The Department of Revenue has released equalized valuations as of August 1, 2012, that show the following changes which allows for projected equalized valuations to be developed Slide 15 Equalized Valuation History Potential reduction in value First property value reduction in 20 years is possible for FY 2012-2013 Impact is significant on tax levy mill rate; smaller impact on the total tax levy dollars Slide 16 Revenue Limit History Wisconsin Act 16 implemented revenue limits beginning with the 1993-94 school year. A district's revenue limit is the maximum amount of revenue that may be raised through state general aid and property tax for the General, Non- Referendum Debt (authorized after August 12, 1993), and Capital Expansion Funds, also referred to as Funds 10, 38, and 41 respectively Key components to the revenue limit Prior year equalized aid, computer aid, and debt service build a base Three year rolling pupil average Current year equalized property value Allowable per pupil increase ($ set by state, $50 for 2012-13) Prior year carryover (non-taxed amount from previous year) One year limitation on taxes Equalization aid Slide 17 Revenue Limit History Major 2012-13 revenue limit changes No major changes to the KASD revenue limit formula Projected a 40 student increase Reduced property value by 3.11% Immediately raised the property tax mill rate (rate charged per $1,000 of value) Carried forward $340,000 of untaxed 2011-12 revenue State added a one-time per pupil adjustment of $212,000 Slide 18 Revenue Limit History Slide 19 Slide 20 Slide 21 Tax Levy Scenarios Various scenarios Tax to the maximum allowable amount 18% increase in the levy amount over FY 2011-2012, projected 18% increase in the mill rate over last years $8.79 per $1,000 ($10.45) Tax to a lesser amount and take the shortfall out of fund balance Any untaxed amount can be added to the levy for FY 2013-2014 This would create a substantial increase in the tax levy for that year Fund balance would have to cover the shortfall in tax revenue Various scenarios Pay down some debt service with fund balance to cut back on overall levy Fund balance will be reduced with no recovery Operating expenses would have to be cut to handle the reduction in the tax levy Other ideas???