Setting The Tax Rate

Sponsored by:

MASA & MoASBO

Presenter:

Chris Straub

Today's Agenda Lunch Overview State Auditor Forms State Assessed Railroad & Utilities

& Proposition C Rollback Senate Bill 711 Implications Conducting a Tax Rate Hearing and Public Notice Additional School Finance Assistance

State Auditor Forms

Some items pre-printed:

Tax Rate Summary Page Line A - Prior Year Tax Rate Ceiling Line C1 - Tax Rate Ceiling at the time of

the election Line E - Maximum Authorized Levy

State Auditor Forms

Form A: Line 5 – Prior Year Assessed Valuation Line 10 – Increase in CPI Line 12 – Prior Year Tax Rate Ceiling Line 14 – Maximum Prior Year From

State Assessed

XYZ School District Assessed Value NoticeFrom ABC County Clerk

Real Estate - Residential $3,700,000

Real Estate - Agricultural $1,600,000

Real Estate - Commercial $2,400,000

Personal Property $2,000,000

Railroad and Utility

Local Real Estate $500,000

Local Personal $100,000

Total $10,300,000

New Construction and Improvements:

Related to Real Estate

$202,000

Related to Personal Property

$90,000

XYZ School District Assessed Value NoticeFrom ABC County Clerk

State Auditor FormsForm A

1. Current Year 2008 Assessed Valuation(a) 8,200,000 + (b) 2,100,000 = $10,300,000 (Real Estate) (Personal Property)

Real Estate - Residential $3,700,000Real Estate - Agricultural $1,600,000Real Estate - Commercial $2,400,000Personal Property $2,000,000

Railroad and UtilityLocal Real Estate $500,000Local Personal $100,000

State Auditor FormsForm A

5. (Pre-printed) Prior Year 2007 Assessed Valuation(a) 8,000,000 + (b) 2,000,000 = $10,000,000 (Real Estate) (Personal Property)

1. Current Year 2008 Assessed Valuation(a) 8,200,000 + (b) 2,100,000 = $10,300,000 (Real Estate) (Personal Property)

2. Assessed Valuation of New Construction and Improvements(a) $202,000 + (b) = ___________ (Real Estate) (Personal Property)

State Auditor FormsForm A

5. (Pre-printed) Prior Year 2007 Assessed Valuation(a) 8,000,000 + (b) 2,000,000 = $10,000,000 (Real Estate) (Personal Property)

1. Current Year 2008 Assessed Valuation(a) 8,200,000 + (b) 2,100,000 = $10,300,000 (Real Estate) (Personal Property)

2. Assessed Valuation of New Construction and Improvements(a) $202,000 + (b) $100,000 = $302,000 (Real Estate) (Personal Property)

State Auditor FormsForm A

4. Adjusted Current Year Assessed Valuation($10,300,000 - $302,000) $9,998,000

8. Adjusted Prior Year Assessed Valuation $10,000,000

State Auditor FormsForm A

9. Percentage Increase in Adjusted Valuation(9,998,000-10,000,00) ÷10,000,000 = -.02%

10. (Pre-printed) Increase in Consumer Price Index

3.9%

11. Adjusted Prior Year Assessed Valuation

$10,000,000

12. (Pre-printed) Prior Year Tax Rate Ceiling $4.00

State Auditor FormsForm A

13. Maximum Prior Year Adjusted Revenue from Locally Assessed Property (10,000,000 X 4.00) ÷ 100 = $400,000

14. (Pre-printed) Maximum Prior Year Revenuefrom State Assessed Property $100,000

15. Total Adjusted Prior Year Revenue(400,000 + 100,000) = $500,000

State Auditor FormsForm A

16. Permitted Reassessment Growth0%

17. Additional Reassessment Revenue Permitted(500,000 x 0%) = $0

18. Total Revenue Permitted in the Current Year$500,000

15. Total Adjusted Prior Year Revenue (400,000 + 100,000) = $500,000

State Auditor FormsForm A

19. Estimated Current Year Revenue from State Assessed Property (before reductions)(See State Tax Commission Report)

$100,000

20. Revenue Permitted from Existing Locally Assessed Property(500,000 - 100,000) = $400,000

18. Total Revenue Permitted in the Current Year$500,000

State Auditor FormsForm A

20. Revenue Permitted from Existing Locally Assessed Property $400,000

21. Adjusted Current Year Assessed(Line 4) $9,998,000

22. Maximum Tax Rate Permitted by Article X, Section 22 and Section 137.073 RSMo(400,000 ÷ 9,998,000) x 100 = $4.0008

State Auditor FormsForm A

22. Maximum Tax Rate Permitted by Article X, Section 22 and Section 137.073 RSMo(400,000 ÷ 9,998,000) x 100 = 4.0008

State Auditor FormsSummary Page

B. Current Year Rate Computed 4.0008 (Because this is less than the maximum authorized levy of

4.02 the tax rate ceiling does increase from 4.0000 to 4.0008)

State Auditor FormsForm B

If voters approved a levy increase in your district since September 1, 2007, you will need to complete Form B.

State Auditor FormsForm B

1. Date of Election2. Amount of Increase Approved by Voters

OR State Rate Approved by Voters3. Ballot language4. Election Results5. Expiration Date if any6. Proposition C Waiver

State Auditor Forms - Form CApplicable it district has an active Debt Service fund.

1. Total current year assessed valuation

$10,300,000

2. Amount required to pay debt service requirementsduring the next calendar year (Jan 08 - Dec 08)

$50,000

3. Estimated costs of collections and anticipateddelinquencies

$2,500

4. Reasonable reserve up to on year's payment

$45,000

5. Total required for debt service

$97,500

6. Anticipated balance at end of current calendar year

$25,000

7. Property tax revenue required for debt service

$72,500

8. Estimated revenue from state assessed property for debtservice for the next calendar year (Jan 08 - Dec 08)

$5,500

9. Revenue required from locally assessed property fordebt service

$67,000

State Auditor FormsForm C9. Revenue required from locally assessed property for

debt service

$67,000

10. Computation of debt service tax rate(67,000 ÷ 10,300,00) x 100

.6505

11. Less Voluntary Reduction By School District

.0505

12. Actual rate to be levied for debt service purposes

.6000

State Auditor FormsSummary Page

AA. Rate to be Levied for Debt Service .6000

State Auditor FormsSummary Page

Complete rest of Summary page if: Election held since Sept. 1 2007 (Line C-2) Line B is less than 2.75 AND Board of

Education adopts Resolution to raise levy to $2.75 (Amendment 2)

Proposition C is not waived (Line G)

Senate Bill 711 Implications

1. In 2009, reassessment affects the actual operating levy in addition to the tax rate ceiling for school districts using a voluntary tax reduction in 2008. (Line H Tax Rate Summary Page)

2. Operating levy increases voted after September 1, 2008 will be subject to reassessment adjustment in 2009.

3. Small schools grant change ($3.43)

Other Items To Complete Proposition C Worksheet Public Notice of Hearing Requirement Public Hearing

Board of Education votes to set tax rate Send State Auditor forms and statement of

required local taxes to appropriate County Clerks

Process must be completed by Sept. 1 Amend budget with Board if appropriate

Questions?

Voter Approved Tax Rate Issues

If your district has a $2.75 tax rate, do you know why?

Example: Tax rate ceiling is $3.00 with a 50-cent Proposition C rollback interrupted at $2.75.

Possible Scenario

District with a $3.00 tax rate ceiling with a 50¢ Proposition C rollback interrupted at $2.75 needs a 50¢ levy increase.

District must ask citizens to increasetax-rate ceiling to $3.75.(3.75 - 50¢ Prop C Rollback = $3.25) OR

Possible Scenario

District must ask citizens to increasetax-rate ceiling to $3.25 and fully waiveProp C rollback.

New Requirement Effective August 28, 2007 District will be required to show additional

revenue from new construction and reassessment separately.

District will also be required to show percent of additional new revenue from reassessment.

New Requirement Effective August 28, 2007

1. New Revenue:New A.V. x Tax Rate. minus Old A.V. x Tax Rate

(10,300,000 x 4.0008) ÷ 100 = $412,082

(10,000,000 x 4.0000) ÷ 100 = $400,000

New Revenue $12,082

New Requirement Effective August 28, 2007

1. New Revenue:

$12,082

2. Revenue from New Const. & Improv. A.V. from New Const. x Tax Rate ÷ 100

(302,000 x 4.0008) ÷ 100 =

$12,082

New Requirement Effective August 28, 2007

1. New Revenue: $12,082

2. Revenue from New Const. $12,082

3. Revenue from Reassessment:

New revenue - revenue from New Const.12,082 – 12,082 = 0

New Requirement Effective August 28, 2007

1. New Revenue: $12,082

2. Revenue from New Const. $12,082

3. Revenue from Reassessment: 0

4. Percent Increase from Reassessment:

Rev. from Reassessment ÷ Old Rev. x 100

(0÷ 400,000) x 100 = 0%

Questions?

Additional Assistance:

MASA School Finance Consultants

Bob Phillips Randy WinstonAllan Crader LeRoy HuffBill Ray Bill Rebore

Call Roger Kurtz at MASA to arrange visit573-638-4825