Tax Cap Limit2013-2014

Can it be greater than 2%?

Agenda:• Tax Levy vs. Tax Rate.• 2% Tax Cap Misconception.• Tax Cap Calculation overview.• How the Base Formula is calculated.• Newark Central School District Calculations.• What does it mean?• Questions.

Tax Levy vs. Tax Rate

Tax Levy – the total amount of taxes a school district raises to help fund its budget after accounting for other revenue sources.

Tax Rate – what each property owner will pay in school taxes so the District receives the tax levy amount.

2% Tax Cap Misconception

The June 2011 law limits the amount that a school district can raise it’s budget in any year to 2%.

Fact:-The growth in the property tax levy is capped at 2%.

-Voter approval if at or below tax cap is 50% +1

-Voter approval if above the tax cap is a supermajority (60%)

Tax Cap CalculationsTax Levy Limit is calculated using 8-steps.

This limit then determines the level of voter approval required for budget approval.

Some portions of the tax levy are excluded from the calculations above.

The Base Formula• Prior School-Year Tax Levy• Tax Base Growth Factor• PILOTS received in prior school year• Tax levy to pay for some court orders/judgments• Tax levy to pay for local capital costs• Allowable levy growth factor• Pilots for the 2013-2014 school year• Available Carry-over from 1012-13

= Tax Levy Limit before Exclusions

Base Formula• Prior School Tax Levy: ----------------------

$11,718,882• X Tax Base Growth Factor: --------------------1.0014 • + Pilots Received Prior School Year: --------

$40,000• - Court Orders/judgments: ---------------------------$0• - Local Capital Costs: ---------------------------------$0• X Growth Factor (2%): ----------------------------1.02 • - Pilots for 2013-2014: -----------------------------

$45,000• + Available Carry-over from 2012-2013:

$179,726= Tax Levy Limit before Exclusions:

$12,139,392

ExclusionsSome Court Orders/Judgments:

Some Local Capital Costs:

Some Pension Contribution Costs:

Exclusions• Court Orders/Judgments: $0• Capital Tax Levy: $0• Pension Exclusions:

o ERS: $0o TRS: $360,735

• Total Exclusions: $360,735

What does it mean?Tax Levy Limit: $12,139,392Total Exclusions: $360,735Tax Levy Limit plus Exclusions: $12,500,127

Percent Increase: = ($12,500,126-$11,712,882) $11,712,882

= 6.72%

What does it mean?• Without considering any exclusions we can have

a tax levy of $12,139,392. With exclusions, the new tax levy limit is $12,500,127.

• As long as the proposed tax levy is at or below the limit, a simple majority (50% +1)of voters are needed to pass the budget

Questions