- Lockport City School District
- 2018-19 Budget Discussion Tax Levy Cap
Tax Cap Levy Discussion
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Deborah A. Coder, Assistant Superintendent for Finance and Management Services
February 7, 2018Current Expenditure Budget
- As of February 7, 2018 – The 2018-2019 Expenditure Budget amount is:
- $100,174,970 or 3.47% above last year. Net expense reductions of $ 777,457 have been made as a result of upcoming retirements and resignations.
Summary of Changes to Expenditure Categories
- RETIREMENTS/RESIGNATIONS as of 2/1/2018
- Six (6) Elementary Positions
- Two (2) Secondary Positions
- Two (2) Special Education Positions
- Five (5) Special Area Positions
- One (1) Administrator Position
- Three (3) Support Staff Positions
Net Employee Salaries/Benefits increases were: $2,057,270
Net Employee Salaries/Benefits increases now: $1,279,813
Expenditure Budget decrease of: $777,457Summary of Changes to Revenue Budget
- USAGE of RESERVES
- Projected Reserve usage was: $2,145,958
- Projected Reserve Usage is now: $2,629,047
- Revenue Budget increase of: $483,089
- TAX LEVY CAP ADJUSTMENT
- Tax Levy Cap was: $758,796
- Tax Levy Cap now: $758,796
- Tax Levy Cap decrease of: $0
- Revenue Budget Net Increase $483,089
2018-2019 Tax Levy Impact
- Current Expenditure Budget $100,174,970
- Preliminary Revenue Budget $60,780,440
- Preliminary 2018-19 Tax Levy Needed $39,394,530
- 2017-2018 Current Tax Levy $37,658,476
- Preliminary Tax Levy Increase $1,736,054
2018-2019 Tax Levy Limit Calculation
- Simple Majority Limit is 2.014941873739130% or $38,417,272
- Current Tax Levy Amount is $39,394,530
- This budget is OVER the Tax Levy Limit by $977,258
Next Steps
- By March 1st, 2018 the district must certify with the Office of the State Comptroller the estimated tax levy increase for the 2018-2019 fiscal year.
- The district must also declare its intentions in this certification on whether or not it intends to exceed the Tax Levy Limit Cap.
- If the district exceeds the cap it must have a 60% or greater passage rate at the May budget vote.
Property Tax Cap Legislation
Overview
School districts generally may not adopt a budget that requires a tax levy that exceeds the prior year's levy by more than 2% or the rate of inflation, whichever is less, unless they officially override the tax levy limitation.
The Tax Cap is Not Always 2%
- The allowable levy growth factor is equal to the lesser of 1.02 or 1 plus the inflation factor.
- Inflation factor calculation is defined by law
- School Districts have an allowable levy growth factor of 1.0200 for the 2018-19 fiscal year.
Calculation Involves Several Components
- Prior Year Levy
- Allowable Levy Growth Factor - 2% or rate of inflation, whichever is less
- Tax Base Growth Factor
- PILOTS
- Carryover
- Exclusions (Capital, Retirement and Torts)
Override For School Districts
- The law allows school districts to override the levy limit.
- If a district intends to override the tax cap law, a ballot statement must be included.
- At least 60% VOTER approval required.
- If an override budget fails to get 60%, the school district can:
- Resubmit the original budget (requires at least 60% voter approval when it's an override budget)
- Submit a revised budget
- If revised budget contains a tax levy within the levy limit, then only 50% voter approval required but if the revised budget seeks to override the levy limit, then at least 60% voter approval is required.
- Go to a contingency budget (0% levy growth)
Reporting Requirements
- School District CFOs must calculate the tax levy limit and report the data elements to the State.
- Must use OSC's form to report.
- User IDs and Password are required to access and submit forms.
- Form must be submitted by March 1st.
- Report must be submitted even if an override is planned.
Property Tax Relief Credit
Overview
- Property Tax Relief Credit
- Tax Law Section 606 (n-1)
- Provides a Real Property Tax Credit to qualified taxpayers between 2016-2019
- Program only applies to School Districts and the Big 4 Cities (Buffalo, Rochester, Syracuse and Yonkers)
- To qualify for the credit
- School District must certify that tax levy is within the levy limit
- Certifications is submitted in the same portal as the Tax Cap form (OSC Online Services)
- Click on link for Tax Cap Compliance
- Certification is due by July 21st.
- Certifications is submitted in the same portal as the Tax Cap form (OSC Online Services)
- Qualified taxpayers must:
- Live in a school district that is complying with the tax levy limit law
- Receive the Basic or Enhanced STAR property tax relief
- Have an income of $275,000 or less
- School District must certify that tax levy is within the levy limit
What does this mean for Lockport
- Scenario #1 Increase Revenue
- 2018-2019 State Aid Increase: $1,332,600
- If 2018-2019 State Aid DOES NOT increase: $0
- Current amount over tax levy limit: $977,258
- Amount needed to adhere to tax cap: $977,258
- If 2018-2019 State Aid DOES NOT increase: $0
- 2018-2019 State Aid Increase: $1,332,600
- Scenario #2 Reduce Expenditures
- 2018-2019 Expenditure Increase: $ 3,356,503
- Current amount over tax levy limit: $977,258
- Amount needed to adhere to tax cap: $977,258
- 2018-2019 Expenditure Increase: $ 3,356,503