Transcript No Slide Title

Marshall Public
Schools #413
Truth in
Taxation
Hearing for
Taxes Payable in
2013
Welcome
December 3rd, 2012
6:00 P.M.
Board Room-Marshall Middle School
Presented by:
Bruce Lamprecht
Director of Business Services
ISD 413, Marshall
Truth in Taxation Law
State law initially approved in 1998.
The 2009 legislature made several changes:
Property tax hearing can now be held a regular meeting. Hearing
must be at 6:00 PM or later. Levy may be adopted at the same
meeting.
Requirement to publish meeting notice was deleted.
All school districts must now hold a hearing. Previously some
districts were exempted from the requirement to hold a hearing.
 You are here for the school district’s annual required hearing.

ISD 413, Marshall
Tax Hearing Presentation





State law requires that we present information on the current
year budget and actual revenue and expenses for the prior year
State law also requires that we present information on the
proposed property tax levy, including:
The percentage increase/decrease over the prior year
Specific purposes and reasons if taxes are being
increased/decreased
District must also allow for public comments
Agenda for Hearing
A. Background on School Funding,
Property Tax Levies, and Budgets
B. Information on District Budget
C. Information on the District’s Proposed
Tax Levy for Taxes Payable in 2013
D. Public Comments and Questions
Public Education is Strong in
Minnesota……



In Minnesota, the most commonly taken standardized
college entrance exam is the ACT. Seventy-eight
percent of Minnesota high school graduates in 2012
took the assessment.
Minnesota’s average composite score of 22.8 was the
highest in the nation among the 27 states in which
more than half of the college-bound students took
the test in 2012. Minnesota has led the nation in
average composite ACT scores for five consecutive
years. The national composite score was 21.1.
Marshall’s composite score was 22.4.
State of MN Constitution


“ARTICLE XIII MISCELLANEOUS SUBJECTS
Section 1. UNIFORM SYSTEM OF PUBLIC
SCHOOLS. The stability of a republican form of
government depending mainly upon the intelligence
of the people, it is the duty of the legislature to
establish a general and uniform system of
public schools. The legislature shall make such
provisions by taxation or otherwise as will secure a
thorough and efficient system of public schools
throughout the state.”
As a result… School District Funding is Highly
Regulated by the State




State sets formulas which determine revenue; most
revenue is based on specified amounts per pupil
State sets tax policy for local schools
State sets maximum authorized property tax levy
(districts can levy less but not more than amount
authorized by state, unless approved by the voters)
State authorizes school board to submit
referendums for operating and capital needs to
voters for approval
State Funding for Schools Has
Not Kept Pace with Inflation



Increases in basic general education revenue per
pupil have been less than inflation
Per-pupil revenue for fiscal year 2013-14 is projected
to be $401 below the 2004-05 inflation adjusted
amount
For Fiscal 2013 and 2014, basic per-pupil funding is
projected to increase by less than 1% per year, while
most districts’ expenses will likely increase, without
budget cuts, by 2-3% annually
Trends in General Education Formula
Allowance for Minnesota School Districts
FY 05 – FY 14
Trends in General Education Formula Allowance
for Minnesota School Districts, 2004-05 through 2013-14
Adjusted for Inflation
Fiscal Year
Formula
Allowance
CPI-U
(2009=1.0) *
Formula
Allowance
in 2013 $s
Change
Since
2004-05
Formula Allow.
if Adjusted for
Annual Inflation
2004-05
4,601
0.8929
5,625
0
4,601
0
2005-06
4,783
0.9268
5,633
8
4,776
-7
2006-07
4,974
0.9511
5,708
84
4,901
-73
2007-08
5,074
0.9860
5,617
-8
5,081
7
2008-09
5,124
1.0000
5,593
-32
5,153
29
2009-10
5,124
1.0093
5,542
-83
5,201
77
2010-11
5,124
1.0298
5,431
-194
5,307
183
2011-12
5,174
1.0601
5,328
-297
5,463
289
2012-13
5,224
1.0699
5,330
-295
5,513
289
2013-14
5,224
1.0915
5,224
-401
5,625
401
SOURCE: Formula Allowance and CPI-U are from Minnesota Department of Education,
Referendum Cap Inflation Estimate 2012
* Consumer Price Index for all urban consumers for the Minneapolis-St. Paul area.
Annual
Funding
Shortfall
Impact is budget cuts and levy
referendums…



With minimal increases in state funding expected,
some districts continue to face projected budget
shortfalls for FY 2014 and FY 2015 and anticipate the
need for budget cuts
To meet local school budget shortfalls, in 2012, 40
Minnesota districts submitted proposals to voters
seeking support of increased operating levies
29 districts, or 73%, passed at least 1 operating levy
question
ISD 413, Marshall
School District Levy
2012 Payable 2013
2013-2014 School Year
 Fiscal Year 2014


ISD 413, Marshall
School Levy vs. Budget Cycle




Unlike cities and counties, a school district does not
set its budget when setting the tax levy
Property Tax Levy
Final levy set in December
Property taxes levied on calendar year basis
 Budget
 Preliminary budget approved in June, six months later
 School district fiscal year is July 1st through June 30th
ISD 413, Marshall, Minnesota
Contrast of City/Township/County Levy Cycle to School District Levy Cycle
2012
2013
2014
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
A E A P A U U U E C O E A E A P A U U U E C O E A E A P A U U U E C O E
N B R R Y N L G P T V C N B R R Y N L G P T V C N B R R Y N L G P T V C
Legislation
City/Twp/County
Tax Levy Decision
Collection of Levy
Budget Year
School District
Tax Levy Decision
Collection of Levy
Budget Year
Budget and Levy Adoption
Calendar
2012
2013
2014
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
A E A P A U U U E C O E A E A P A U U U E C O E A E A P A U U U E C O E
N B R R Y N L G P T V C N B R R Y N L G P T V C N B R R Y N L G P T V C
Audit 2011-2012
2012/2013 Current Budget
13-14 Budget Preparation
Adoption of 13-14 Budget
Update Current Budget Year
Final Current Budget Year Update
Tax Levy Decision
Collection of Levy
2013-2014 Budget Year
Property Tax Share By
Governmental Entity
Change in Tax Levy Does not
Determine Change in Budget



Tax levy is based on many state-determined
formulas
Some increases in tax levies are revenue
neutral, offset by reductions in state aid
Expenditure budget is limited by state-set
revenue formulas, voter-approved levies, and
fund balance, not just by tax levies
School District Budget
Current School and Fiscal Year
2012-2013
MARSHALL PUBLIC SCHOOLS
2012-2013 BUDGET OVERVIEW
REVENUES
11-12 Actual
---------------$21,532,256
12-13 Budget
----------------$21,496,586
Foodservice
$1,329,770
$1,379,304
3.7%
Transportation
$1,276,430
$996,481
-21.9%
Community Services
$2,204,968
$2,081,805
-5.6%
$891,762
$739,641
-17.0%
$2,964,027
$3,057,307
3.1%
$30,199,213
$29,751,124
-1.5%
General Fund
Capital Outlay
Debt Service
Total
% Change
-------------.1%
MARSHALL PUBLIC SCHOOLS
2012-2013 BUDGET OVERVIEW
EXPENDITURES
11-12 Actual
---------------$21,243,942
12-13 Budget
----------------$21,317,402
% Change
------------.3%
Foodservice
$1,341,224
$1,362,814
.2%
Transportation
$1,276,430
$1,280,000
.03%
Community Services
$2,193,210
$2,130,386
-2.9%
$852,135
$895,319
5.1%
$3,032,524
$3,021,659
-.4%
$29,939,465
$30,007,850
.2%
General Fund
Capital Outlay
Debt Service
Total
2012-2013 Revised Budget
Analysis
REVISED PROJECTED JUNE 30TH, 2013 ENDING FUND BALANCES
FUND
STARTING REVENUE EXPEND
ENDING
GENERAL
$3,314,461 $21,496,586 $21,317,402 $3,493,645
FOODSERVICE
$162,534 $1,379,304 $1,362,814 $179,024
TRANSPORTATION
$0
$996,481 $1,280,000 -$283,519
COMMUNITY SERVICES $122,187 $2,081,805 $2,130,386 $73,606
CAPITAL OUTLAY
$763,168 $739,641 $895,319 $607,490
DEBT REDEMPTION
$416,869 $3,057,307 $3,021,659 $452,517
TOTAL
$4,779,219 $29,751,124 $30,007,580 $4,522,763
General Fund Expenditures
June 30th, 2012
Fiscal and Other Fixed Cost
Programs
Site, Buildings, and
0% District and School Admin
Equipment
5%
12%
District Support Services
Pupil Support Services
4%
Instructional Support Services
6%
Exceptional Instruction
19%
Vocational Instruction
2%
4%
Regular Instruction
48%
District and School Admin
District Support Services
Regular Instruction
Vocational Instruction
Exceptional Instruction
Instructional Support Services
Pupil Support Services
Site, Buildings, and Equipment
Fiscal and Other Fixed Cost Programs
ISD #413, Marshall
Marshall Public Schools
Summary of Staff Employed
Staff Classification
Certified
Administration
Teacher
Full-time
Part-time
Nurses
Non-Certified
ASG/Confidential/Others
Support Services
Custodial
Total
2011-12
Actual
2012-13
Budget
11-12 vs 12-13
Percent Change
10.50
10.50
0.0%
161.00
14.40
2.00
163.00
17.50
2.00
1.2%
21.5%
0.0%
25.90
79.20
19.50
28.10
80.00
20.10
8.5%
1.0%
3.1%
312.50
321.20
2.8%
ISD #413 - MARSHALL GENERAL FUND
EXPENDITURES JUNE 30th, 2012
Equipment
1%
Supplies and Materials
4%
Other Expenditures/Transfers
2%
Salaries and Wages
Purchased Services
11%
Employee Benefits
Purchased Services
Supplies and Materials
Equipment
Employee Benefits
18%
Other Expenditures/Transfers
Salaries and Wages
64%
ISD #413-Marshall-General Fund
Expenditures By Object Code
$16,000,000
$14,000,000
$12,000,000
$10,000,000
Salaries and Wages
Employee Benefits
Purchased Services
Supplies and Materials
Other Expenditures/Transfers
Equipment
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
ISD 413, Marshall
ISD #413 - MARSHALL - CHANGE IN GENERAL FUND INSTRUCTION EXPENDITURES
SINCE 2003
60.00%
50.00%
40.00%
30.00%
Regular & Vocational Instruction
Exceptional Instruction
20.00%
10.00%
0.00%
-10.00%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
ISD #413, Marshall
ISD #413 - MARSHALL - GENERAL FUND EXPENDITURES BY PROGRAM
$12,000,000
$10,000,000
2004
$8,000,000
2003
2005
2006
2007
2008
$6,000,000
2009
2011
$4,000,000
2010
2012
$2,000,000
District and School
Admin
District Support
Services
Regular Instruction
Vocational Instruction
Exceptional
Instruction
Instructional Support
Services
Pupil Support
Services
Site, Buildings, and
Equipment
Fiscal and Other
Fixed Cost Programs
$0
ISD #413, Marshall
ISD #413 Audit Highlights





The audit results for 2011-2012 showed an ending
General Fund balance of $3,314,461 or 15.6% of
expenditures.
The Transportation Fund showed a zero ending fund
balance after a revenue transfer from Fund 01.
The Capital Outlay Fund ended with a balance of
$763,168 exceeding the established goal of $400,000
by a goodly amount.
The Foodservice Fund ended with a much better
ending fund balance than projected considering two
major capital purchases.
The Debt Service Fund balance provides cash flow for
2012-2013 Expenditure Budget Makeup
10%
3%
7%
4%
General
5%
Foodservice
Transportation
Community Services
Capital Outlay
Debt Service
71%
ISD #413, Marshall


The Revised General Fund Budget for 20122013 shows a $104,335 deficit in revenues
over expenditures. This includes a transfer of
$283,519 to the Transportation Fund to zero
out the fund balance.
This translates into a $2,765,751 ending fund
balance or a 14.97 fund balance percent with
a stated, approved goal of 8.0% (fund
balance/expenditures) being the minimum.
How Much Revenue is
State Aid vs. Local Sources?
General Fund Revenues By
Source
Sales and Other Conversions
of Assets
1%
Revenue From Federal
Sources
Local Property Tax Levies
3%
10%
Other Local and County
Revenues
8%
Revenue From State Sources
78%
ISD #413 - MARSHALL - GENERAL FUND
REVENUES BY SOURCE
$18,000,000
$16,000,000
$14,000,000
$12,000,000
Local Property Tax Levies
Other Local and County Revenues
$10,000,000
Revenue From State Sources
Revenue From Federal Sources
$8,000,000
Sales and Other Conversions of Assets
$6,000,000
$4,000,000
$2,000,000
$0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
General Fund Revenue Sources
by Percent
ISD 413, Marshall
General Fund Changes in Basic per Pupil Allowance
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03*
2003-04
2004-05
2005-06
2006-07
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013
Total Change Per Pupil
$3,581
$3,530
$3,740
$3,964
$4,068
$4,601
$4,601
$4,601
$4,783
$4,974
$5,074
$5,124
$5,124
$5,124
$5,174
$5,224
$1,643
2.17%
-1.42%
5.95%
5.99%
2.62%
13.10%
0.00%
0.00%
3.96%
3.99%
2.01%
0.99%
0.00%
0.00%
0.98%
0.97%
45.88%
Revenue-Adjusted For
Inflation
ISD #413 - MARSHALL
FUND BALANCE/CASH BALANCE ANALYSIS
GENERAL FUND
$4,000,000
$3,000,000
$2,000,000
$1,000,000
FUND BALANCE-ENDING
ADJUSTED CASH BALANCES
$0
($1,000,000)
($2,000,000)
($3,000,000)
($4,000,000)
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Proposed 2013 Property Tax
Levy




Determination of levy
Comparison 2012 to 2013 levies
Specific reasons for changes in tax levy
Impact on taxpayers
ISD 413, Marshall
Authority for School Levies
A School District Tax Levy must be either:
 Set by State Formula
or
 Voter Approved
Property Tax Background



Every owner of taxable property pays
property taxes for the various ‘taxing
jurisdictions’ (county, city or township, school
district, special districts) in which the property
is located
Each taxing jurisdiction sets its own tax levy,
often based on limits in state law
County sends out bills, collects taxes from
property owners, and distributes funds back
to other taxing jurisdictions
School District Property Taxes





Each school district may levy taxes in up to
30 different categories
‘Levy Limits’ (maximum levy amounts) for
each category are set either by:
State law, or
Voter approval
Minnesota Department of Education (MDE)
calculates detailed levy limits for each district
Property Tax Background
School District Property Taxes


Key steps in the process are
summarized on the next slide
Any of these steps may affect the taxes
on a parcel of property, but the district
has control over only 1 of the 7 steps
The Homestead Credit Shift


The 2011 legislature repealed the
Homestead Market Value Credit
In its place, the Legislature
implemented a Homestead Market
Value Exclusion
Property Tax History-$150K
Parcel
Property Taxes by Year
and Property Type
Primary
Parcel's
District
Rate
Rate
Payable
School
Market
Total
Against
Against
Residential
Commercial
Agricultural
Year
Year
Value
Levy
RMV
NTC
Homestead
Industrial
Land & Bldg
2001
2001-02
150,000
5,249,302
0.001141
0.657324
$1,157
$1,650
$542
2002
2002-03
150,000
1,780,059
0.000057
0.233595
$359
$534
$193
2003
2003-04
150,000
1,685,744
0.000064
0.209072
$323
$480
$172
2004
2004-05
150,000
3,568,331
0.000537
0.374747
$643
$924
$309
2005
2005-06
150,000
3,556,922
0.000566
0.340827
$596
$852
$281
2006
2006-07
150,000
4,253,869
0.000657
0.369130
$652
$929
$305
2007
2007-08
150,000
4,442,638
0.000652
0.345149
$616
$874
$285
2008
2008-09
150,000
5,427,676
0.001596
0.344482
$756
$1,015
$284
2009
2009-10
150,000
5,560,578
0.001594
0.327338
$730
$976
$270
2010
2010-11
150,000
5,489,763
0.001610
0.289605
$676
$893
$239
2011
2011-12
150,000
5,714,438
0.001662
0.308009
$711
$942
$254
2012
2012-13
150,000
5,880,186
0.001641
0.300163
$696
$922
$248
2013
Excluding Addition
150,000
6,172,715
0.001668
0.318779
$728
$967
$263
2013
Including Addition
150,000
6,172,715
0.001668
0.318779
$728
$967
$263
Changing School District
Property Taxes
Comparable Levies On
Residential Homesteads
Changing Property Taxes On A
$150K Residential Homestead
SCHOOL DISTRICT FUNDS
The school district has three revenue and expenditure funds that receive local tax levies to help support the
various programs included in the funds.
1.
GENERAL FUND LEVY
a.
b.
c.
d.
e.
f.
g.
2.
COMMUNITY SERVICE FUND LEVY
a.
b.
3.
The lease levy to pay the rent for MECLA is included here.
The local operating referendum is also part of this fund.
Equity and Transition levy are two more components of the total.
Lost Interest, Safe Schools, Unemployment and Career & Technical levy make up part of this.
Provides funding for facilities maintenance and instructional equipment.
Provides funds for Health and Safety code compliance, asbestos removal, underground storage tank
replacement, and safety requirements
Integration revenue and QComp levy are also part of this fund levy amount.
Based on the adult population in the District.
Early Childhood levy is based on the number of children under 5 years of age.
DEBT SERVICE FUND LEVY
a.
b.
Based on annual debt retirement schedules. Annual levy is what is needed to pay off bonds.
OPEB (Implicit Rate Subsidy) funding is included in this category.
ISD 413, Marshall
How are the Proposed 2012 School Taxes Spent?
Amount
General Fund
Provides funding for the district instructional programs,
alternative compensation, integration program, also part of
the costs for the maintenance of technology infrastructure
and for the purchase of instructional equipment, building
maintenance and Health & Safety:
Community Education Fund
Levy for Community Education Programs:
Debt Service (Including OPEB)
Levy for repayment of principal and interest on district debt:
Total Levy:
$2,833,931
$184,214
$3,162,932
$6,181,077
Pay 2012/Pay 2013 Levy Comparison
Fund
11 Pay 12
12 Pay 13
General
2,666,738.77
2,833,931.25
167,192.48
6.27%
172,604.86
184,213.55
11,608.69
6.73%
124,635.71
4.29%
133,376.87
-2,546.13
-1.87%
5,880,186.24 6,181,076.99
300,890.75
5.12%
Community
Service
General Debt
Service
OPEB Debt
Service
Total
2,904,919.61 3,029,555.32
135,923.00
Increase
% Change
2012-2013 Tax Levy Spending
General Education
46%
Debt Service
51%
Community Education
3%
ISD 413, Marshall
Basic general education aid and levy formula
(1) NTC
(2) Sales Ratio
(3) ANTC
(4) Standard Levy Limit
(5) Gen Education Basic Levy Limit
2011
2011
2011
14,332,198
94.6%
15,150,315
FY 2014
0.0%
2012
0.00
2013-2014
Pay 2013
2558.32
5,224.00
13,364,663.68
(7) Basic General Education Aid Revenue
FY 2014
13,364,663.68
(8) General Education Aid Percentage
FY 2014
100.0%
AMCPU
Formula Allowance
(6) Basic General Education Revenue
ISD 413, Marshall
District #413 Proposed Property Tax Stmt. for 2013
Actual 2012 Property Tax
Proposed 2013 Property Tax
Voter Approved Levies
$4,251,290.29
$4,403,872.16
Other Local Levies
$1,628,895.95
$1,777,204.83
School District Total
$5,880,186.24
$6,181,076.99
ISD 413, Marshall
The School District Levy is
increasing by:
$300,890.75
or
5.12%
Tax Levy History














1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Pay
Pay
Pay
Pay
Pay
Pay
Pay
Pay
Pay
Pay
Pay
Pay
Pay
Pay
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
$5,149,862.38
$5,063,847.46
$1,780,058.97
$1,685,744.13
$3,568,330.76
$3,556,922.39
$4,253,869.00
$4,442,638.19
$5,427,675.70
$5,560,578.16
$5,489,763.14
$5,714,432.29
$5,880,186.24
$6,181,076.99
2.60% Decrease
1.67% Decrease
64.58% Decrease
5.30% Decrease
111.68% Increase
0.32% Decrease
19.59% Increase
4.44% Increase
22.17% Increase
2.40% Increase
1.27% Decrease
4.09% Increase
2.90% Increase
5.12% Increase
ISD 413, Marshall
What are the main variables that
cause property tax increases and
decreases?
1.
2.
3.
4.
5.
Changes in market values
Changes in class rates/history
Market Value Homestead Exclusion
Voter Approved Referendums
Ongoing Legislative Action
ISD 413, Marshall
Changes in Market Value
The market values are final and are not a
subject for the upcoming budget hearings.
They were discussed at the local board of
review and county board of equalization
hearings held earlier this year. The final
taxable market values may reflect a reduction
under the limited value law. If this property is
a qualifying homestead, the final taxable
market values may exclude improvements
which you made to this property.
Net Tax Capacity Property
Comparison
Description
Residential
Homestead
Commercial
Industrial
Agricultural
Homestead
(Land &
Buildings)
Property Value
$200,000
$200,000
$200,000
Tax Rate Pay
2013
1.00 %
2.00%
.50%
Net Tax Capacity
Amount
$2,000.00
$4,000.00
$1,000.00
State Property Tax Refunds
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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
local taxpayers, 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 web site at www.taxes.state.mn.us
State Property Tax Refunds
Minnesota Property Tax Refund (aka
“Circuit Breaker” Refund)
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Has existed since the 1970’s
Available to all owners of homestead property
Annual income must be approx. $99,240 or less
(income limit is higher if you have dependents)
Refund is a sliding scale, based on total property
taxes and income
Maximum refund is $2,370
Especially helpful to those with lower incomes
Fill out state tax form M-1PR
State Property Tax Refunds
Special Property Tax Refund
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Available for all homestead properties with a gross
tax increase of at least 12% and $100 over the
prior year
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
Fill out state tax form M-1PR
Minnesota Department of Revenue
(651) 296-3781
Senior Citizen Property Tax Deferral
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Allows people 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 home
Taxes paid in any year limited to 3% of household income for
year before entering deferral program; this amount does not
change in future years
Additional taxes are deferred, but not forgiven
State charges interest up to 5% per year on deferred taxes and
attaches a lien to the property
The deferred property taxes plus accrued interest must be paid
when the home is sold or the homeowner(s) dies
ISD 413, Marshall
Whereas, Pursuant to Minnesota Statutes the School Board of Independent
School District No. 413, Marshall, Minnesota, is authorized to make the
following proposed tax levies for general purposes:
General Fund
Community Service
Debt
Total Proposed School Tax Levy
$2,833,931.25
$184,213.55
$3,162,932.19
$6,181,076.99
Now Therefore, Be it resolved by the School Board of Independent School
District No. 413, Marshall, Minnesota, that the amount to be levied in 2012
to be collected in 2013is set at $6,181,076.99. The clerk of the Marshall
School Board is authorized to certify the proposed levy to the County
Auditor of Lyon County, Minnesota.
Next Steps
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Tonight-Board will accept public
comments and questions on proposed
levy
December 17th-Board will conduct
subsequent hearing (if necessary) and
certify final amount of tax levy payable
in 2013
ISD 413, Marshall
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Public Comments and
Questions
THE END
THANK YOU FOR
ATTENDING!