Taxes Payable 2014 Property Tax Levy and Budget. Regular School Board Meeting December 17, 2013

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1 Taxes Payable 2014 Property Tax Levy and Budget Regular School Board Meeting December 17, 2013

2 Truth in Taxation Law State law requires that school districts present the following information: current year budget proposed property tax levy, including: the percentage increase over the prior year specific purposes and reasons for which taxes are being increased, and that we allow for public comments.

3 Truth in Taxation Law Property tax levies are highly regulated by the state: The State sets formulas which determine the level of funding for which school districts can levy. The State sets the maximum property tax levy: School districts are allowed to levy less than the maximum, often resulting in loss of state aid Counties also play a part in how school district levies are spread by determining the value of each parcel in the district.

4 Truth in Taxation Law The 2013 Legislature made a significant change to how property taxes are calculated: Increase in state aid for several levy categories resulting in reductions in tax levies (revenue neutral for districts) Addition of Student Achievement levy resulting in an increase in tax levies Ability for school boards to move voter-approved referendum to board-authorized referendum and location equity revenue

5 The Budget Revenue Expenditure Budget Budget General Fund Unrestricted/Unassigned $ 51,843,563 $ 51,821,072 Restricted 2,055,091 2,575,695 Assigned 1,423,691 2,623,691 General Fund $ 55,322,345 $ 57,020,458 Food Service Fund 2,277,690 2,277,690 Community Service Fund 2,621,635 2,621,635 Building Construction Capital Projects - 2,098,330 Debt Service Fund 9,207,953 8,940,500 OPEB Debt Service Fund 309, ,720 Trust and Agency Fund 100, ,000 Total All Funds $ 69,839,409 $ 73,353,333

6 Revenues Community Service $2,621,635 4% Food Service $2,277,690 3% Building Construction Capital Projects $- 0% Debt Service Fund $9,207,953 13% Trust & Agency Fund $100,000 0% OPEB Trust $309,786 1% General Fund $55,322,345 79%

7 Expenditures Community Service $2,621,635 4% Building Construction Capital Projects $2,098,330 3% Trust & Agency Fund Debt Service Fund $100,000 $8,940,500 0% 12% OPEB Trust $294,720 0% Food Service $2,277,690 3% General Fund $57,020,458 78%

8 General Fund Revenue Sources Interest $10,000 Federal 0% $1,605,606 3% Other $831,677 1% Levy $10,241,011 19% State $42,634,051 77%

9 General Fund Expenditures Supplies & Materials $1,630,358 3% Capital & Equipment $7,098,094 12% Borrowing Costs $- 0% Fiscal & Other Costs $258,110 0% Purchased Services $6,081,671 11% Compensation $41,952,225 74%

10 The Budget The Spring Lake Park School District s budget is reviewed internally at various times during the school year Informal updates are given to the School Boar throughout the year Revisions for this current year, if necessary, will be brought to the School Board for approval prior to June 30, 2014

11 Levy Information Data due to Department of Education Summer 2013 Preliminary levy approval September 2013 Levy approval December 2013 Property taxes collected during the calendar year 2014 Revenue school year

12 Total Levy by Fund Proposed Payable Percent Fund 2014 Levy 2013 Levy Change Change General $ 9,683,183 $ 10,168,412 $ (485,229) (4.77) % Community Service $ 461,413 $ 461,966 $ (553) (0.12) % Debt Service $ 9,400,623 $ 9,255,634 $ 144, % OPEB Debt Service $ 421,012 $ 309,741 $ 111, % $ 19,966,231 $ 20,195,753 $ (229,522) (1.14) %

13 General Fund levy COMPONENTS Proposed Payable Percent 2014 Levy 2013 Levy Change Change Referendum Authority * $ 1,750,786 $ 4,956,763 $ (3,205,977) (64.68) % Location Equity * 2,410,927 - $ 2,410,927 n/a % Transition * 270, ,941 9, % Equity * 784, ,639 84, % Student Achievement 109, ,473 n/a % Capital Projects Referendum 940,446 1,026,951 (86,505) (8.42) % Operating Capital * 480, ,399 (207,246) (30.15) % Alternative Teacher Comp 458, ,134 (43,947) (8.75) % Safe Schools/Crime 273, ,038 42, % Health & Safety/Alt. Facilities 193, ,605 61, % Integration 220, ,000 67, % Lease 727, , , % Career Technical 80,264 77,852 2, % Deferred Maintenance * 321, ,214 (1,816) (0.56) % Unemployment 100, , % Adjustments 428, , , % Abatements 131, ,591 (99,621) (43.02) % * Equalized $ 9,683,183 $ 10,168,412 $ (485,229) (4.77) %

14 General Fund Levy Explanation of Changes: Referendum Authority Voter Approved Decrease of $3,205,97 relates transfer of $424 per pupil in levy authority to a new Location Equity revenue ($2.4M) as well as increase in state equalization portion ($800K). Location Equity Increase of $2,410,927 for this new revenue category. These funds were transferred from Voter Approved Referendum Authority above.

15 General Fund Levy Explanation of Changes: Student Achievement Increase of $109,473 for this new levy category. Revenue to the district is neutral as the same amount is reduced from the basic allowance in state aid. Operating Capital Decrease of $207,246 reflects increase in state dollars towards this revenue category. Revenue to the district is neutral as the same amount will be received from the state rather than collected through taxes.

16 General Fund Levy Explanation of Changes: Adjustments Levy calculations are initially based on enrollment or expenditure projections (depends on levy component). Each year, the levies for previous years are recalculated based on actual enrollment or expenditures and adjusted during the current levy year. Of the $428,011 in total adjustments, $378,636 is based on enrollment exceeding projections and ($49,375) is based on expenditures that were less than projections.

17 General Fund Levy Explanation of Changes: Abatements School districts receive taxes based on enrollment and actual expenditure amounts (limited by formula) rather than by property value. Taxpayers have a window of time to challenge their taxable property value with the County. If the County subsequently lowers their value their taxes decrease as well. This reduces the amount the District receives in the coming year. That amount is then added back in and redistributed to all taxpayers the following year. The amount on payable 2014 taxes is lower than 2013 year.

18 Community Service Levy Proposed Payable Percent 2014 Levy 2013 Levy Change Change Basic Levy $ 220,590 $ 219,036 $ 1, % Early Childhood $ 127,227 $ 138,174 $ (10,947) (7.92) % Home Visitation $ 3,323 $ 3,586 $ (263) (7.33) % School Age Care $ 80,000 $ 80,000 $ - - % Adjustments $ 24,912 $ 12,527 $ 12, % Abatements $ 5,361 $ 8,643 $ (3,282) (37.97) % $ 461,413 $ 461,966 $ (553) (0.12) % Adjustments reflect programs where expenditures were higher than anticipated due to participation of students. Adjustments The Minnesota Department of Education recalculated levies for the past three levy years based on updated student and expenditure information for those years.

19 Debt Service Levy Proposed Payable Percent 2014 Levy 2013 Levy Change Change Required Levy of 105% of $ 9,527,781 $ 9,384,901 $ 142, % Scheduled Principal & Interest Adjustments $ (295,466) $ (345,468) $ 50,002 (14.47) % Abatements $ 168,308 $ 216,201 $ (47,893) (22.15) % $ 9,400,623 $ 9,255,634 $ 144, % Adjustments For Debt Service levies, the Minnesota Department of Education recalculated the amount district s need to meet future obligations plus an additional 5%. If a district s balance gets above that amount, adjustments are made to reduce future levies.

20 OPEB Debt Service Levy Proposed Payable Percent 2014 Levy 2013 Levy Change Change Required Levy of 105% of $ 413,931 $ 308,931 $ 105, % Scheduled Principal & Interest # /0 Adjustments $ (4,353) $ (2,712) $ (1,641) # /0 % Abatements $ 11,434 $ 3,522 $ 7, % $ 421,012 $ 309,741 $ 111, % Adjustments For Debt Service levies, the Minnesota Department of Education recalculated the amount districts need to meet future obligations plus an additional 5%. If a district s balance gets above that amount, adjustments are made to reduce future levies.

21 What causes a change in property taxes? Changes in levy components Shifts from state aid to levy, or levy to state aid Legislation Changes in market values Individual parcel District-wide Changes in tax capacity Voter-approved referendums Changes in student enrollment counts

22 Market Value History

23 State Property Tax Refunds The State of Minnesota has two tax refund programs and one tax deferral program available for owners of homestead property. These programs may reduce the net tax burden for a local taxpayer, but only if you take time to complete and send in the forms. For help with the forms and instructions: Consult your tax professional or Visit the Department of Revenue website at

24 State Property Tax Refunds Minnesota Property Tax Refund ( Circuit Breaker refund) Has existed since 1970s Is available to all owners of homestead property Annual income must be approximately $100,780 or less (income limit is higher if you have dependents) Refund is a sliding scale, based upon total property taxes and income The maximum refund is $2,460 This is especially helpful to those with lower incomes What do you need to do? Fill out state tax form M-1PR

25 State Property Tax Refunds Special Property Tax Refund This is available for all homestead properties with a gross tax increase of at least 12%, and $100 over the prior year The refund is 60% of the amount by which the tax increase exceeds the greater of 12% or $100, up to a maximum of $1,000 No income limits What do you need to do? Fill out state tax form M-1PR

26 Senior Citizen Property Tax Deferral This allows those 65 years of age or older, with a household income of $60,000 or less, to defer a portion of the property taxes on their homes Taxes paid in any year are limited to 3% of household income for the year before entering deferral program. This amount does not change in future years Additional taxes are deferred, but not forgiven The State charges interest up to 5% per year on deferred taxes and attaches a lien to the property Deferred property taxes, plus accrued interest, must be paid when the home is sold or the homeowner dies

27 Taxes Payable 2014 Proposed Property Tax Levy Discussion and Public Comment