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Taxpayer Impact of Creation of a New High School and K-12 District in Hellgate Elementary.

Jim StandaertAug 1, 2014

443-0620 - jestandaert@yahoo.com

TDr. James Standaert is the retired Senior Fiscal Analyst for the State of Montana. Dr. Standaert has a BS degree from Gonzaga University in English and a PhD from Washington State University in Agricultural Economics. He has served as an assistant professor at the North Carolina State University, Montana State University, and as an adjunct professor at Carroll College.

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Taxable Value Missoula HS, Missoula Elem & Hellgate Elem 1994 - 2014

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Thou

sand

s

Fiscal Year

Taxable Value - Missoula HS and Elem and Hellgate Elementary

Missoula HS

Missoula Elem

Hellgate Elem

129%

113%

118%

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Centrally Assessed, 16,977,705 , 16%

Commercial, 23,511,963 , 21%

Residential, 67,249,674 , 61%

Ag and Timber Land, 77,898 , 0%

All Other, 2,436,930 ,

Taxable Value by Property Tax Classes - Missoula Elementary - FY 2013

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Centrally Assessed, 1,703,619 , 6%

Commercial, 12,169,030 , 40%

Residential, 14,116,466 , 46%

Ag and Timber Land, 46,716 , 0% All Other, 2,619,570 ,

8%

Taxable Value by Property Tax Classes - Hellgate Elementary - FY 2013

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District General Fund Budgets – FY 2014 – Lowest Taxpayer Impact

Missoula High School New Missoula High School New Valley View HSANB 3,701 3,092 609

Taxable Value $183,502,389 $152,520,775 $30,981,614

Maximum Budget = Actual Budget -

$27.2 m Net Mill Difference Net Mill Difference

Overbase Property Tax -3.7 Mills -8.8 Mills

Base Budget-$21.8 m $5.4 m - 29.4 millsMax Bud = Actual

Bud = $22.8 m

Overbase Property TaxBase Property Taxes

$4.0 m - 22.0 mills Base Bud = $18.3 m $4.6 m - 29.9 mills Max Bud = $4.7 m

Base Property TaxesBase Bud = Actual

Bud = $3.8 mOverbase Property

Tax - $0

$2.7 m - 17.8 mills Base Property Taxes$1.3 million - 42.6 mills

State Support State Support State Support

$17.7 Million $15.5 million $2.4 m65% 68% 65%

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Create New Valley View High School – Mill Change Summary

Current LawProposed

Law

Proposed Law Less Current

Law Current LawProposed

Law

Proposed Law Less Current

LawBase Mills 22.0 17.8 (4.2) 22.0 42.6 20.6 OverBase Mills 29.4 29.9 0.5 29.4 - (29.4) Total GF Mills 51.4 47.7 (3.7) 51.4 42.6 (8.8)

General Fund Mills - Current Law and Proposed Law - FY 2014 DataProposed Law: Create new Valley View (K-12 District replaces Hellgate El), Reduce Size of Missoula HS

Assumes that the new Valley View HS will budget the general fund budget at its base budget. Assumes Missoula HS will budget at its maximum budget, as it does currently

Lowest Tax Payer Impact ScenarioMissoula HS Valley View High School

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District General Fund Budgets – FY 2014 - Highest Taxpayer Impact (without a Vote)

Missoula High School New Missoula High School New Valley View HS3,701 3,092 609

$183,502,389 $152,520,775 $30,981,614

Net Mill Difference Net Mill DifferenceOverbase Property Tax 2.1 Mills 21.6 Mills

$5.4 m - 29.4 millsActual Bud =

$23.7 m

Max Bud= 22.8 mOverbase & Overmax

Property Tax

Base Property Taxes

$4.0 m - 22.0 mills Base Bud=$18.3 mMax Bud = Actual

Bud = 4.7 m

Base Property Taxes Base Bud = $3.8 m

Overbase Property Tax - $0.9 m - 30.4

mills

$2.7 m - 17.8 mills Base Property Taxes$1.3 million - 42.6 mills

State Support State Support State Support

$17.7 Million $15.5 million $2.4 m65% 68% 52%

$5.4 m - 35.6 mills

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Create New Valley View High School – Mill Change Summary –Highest Taxpayer Impact (without a vote)

Current LawProposed

Law

Proposed Law Less Current

Law Current LawProposed

Law

Proposed Law Less Current

LawBase Mills 22.0 17.8 (4.2) 22.0 42.6 20.6 OverBase Mills 29.4 35.6 6.2 29.4 30.4 1.0 Total GF Mills 51.4 53.4 2.1 51.4 73.0 21.6

Missoula HS Valley View High School

Assumes that the Valley View HS will budget the general fund budget at its maximum budget, increasing its overbase mills from zero to 30.4 mills.

AssumesMissoula high school will budget without a vote so that it consumes prior year's overbase property tax revenue. Its overbase mills would increase from 29.4 to 35.6 mills.

General Fund Mills - Current Law and Proposed Law - FY 2014 DataProposed Law: Create new Valley View (K-12 District replaces Hellgate El), Reduce Size of Missoula HS

Highest Tax Payer Impact Scenario (Without a Vote)

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Debt Service Guaranteed Tax Base Aid

State law guarantees 140% of the statewide taxable value per ANB for debt service purposes

In FY 2015, This is $78.68 per mill per ANB Statewide for high school, and $33.14 for elementary

With a taxable value of $31 million and 609 ANB, Valley View's high school's mill value per ANB is $50.87

This means ValleyView's debt service needs would be subsidized by the state at 35% subsidization rate

[20-9-366 MCA]

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Debt Service Guaranteed Tax Base Aid

A bond issue of $22 million, may have an annual debt service cost at 3% of $1.43 million for 20 years, which is 46 mills in Valley View on a $31 million tax base.

However, The state would pay for 35% of this through the debt servive GTB, and local taxpayers would pay only around 30 mills

Caveat - The total available statewide for debt service needs is set by the legislature and is prorated if not sufficient to cover the debt service needs statewide.

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Bonded Indebtedness Capacity

For Valley View, this means the bonded indebtedness limit is $47.0 million

This is $78.68 times 1000 times 609 HS ANB times 50%, ($24.0 milllion) plus$33.14 times 1000 times 1,390 Elementary ANB times 50% ($23.0 million)

State law says that a K-12 district may borrow in general obligation bonds up to 50% of the statewide high school guarantee mill value per ANB plus 50% of the statewide elementary guarantee mill value per ANB (20-9-401)