Transcript No Slide Title

Marshall Public
Schools #413
Truth in
Taxation
Hearing for
Taxes Payable in
2011
Welcome
December 6th, 2010
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.
 Your 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 over the prior year
Specific purposes and reasons if taxes are being increased
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 2011
D. Public Comments and Questions
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.”
… School District Revenues and Taxes
As a result
Are Highly Regulated by the State
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
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

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
Increases in basic general education revenue per
pupil have been less than inflation
Per-pupil revenue for fiscal year 2010-11 is $594
below the 2002-03 inflation adjusted amount
For Fiscal 2012 and 2013, per-pupil funding is not
projected to increase, possibly decrease, while most
districts’ expenses will increase by at least 1-3%
annually.
Impact is budget cuts and levy
referendums…


With no increase in state funding many districts are
facing projected budget shortfalls for FY 2012 and
anticipate the need for budget cuts.
To meet local school budget shortfalls, on 11/2/10,
77 Minnesota districts submitted proposals to voters
on seeking support of increased operating levies: 43
Districts or 56% passed at least 1 operating levy
question, 34 failed.
Trends in General Education Formula
Allowance for Minnesota School Districts
FY 03 – FY 11
ISD 413, Marshall
School District Levy
2010 Payable 2011
2011-2012 School Year
 Fiscal Year 2012


ISD 413, Marshall
School Levy vs. Budget Cycle

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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
 Final budget approved in June, six months later
 School fiscal year is July 1st through June 30th
ISD 413, Marshall, Minnesota
Contrast of City/Township/County Levy Cycle to School District Levy Cycle
2010
2011
2012
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
2010
2011
2012
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 2009-2010
2010/2011 Current Budget
11-12 Budget Preparation
Adoption of 11-12 Budget
Update Current Budget Year
Final Current Budget Year Update
Tax Levy Decision
Collection of Levy
2011-2012 Budget Year
Change in Tax Levy Does not
Determine Change in Budget
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
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
2010-2011
MARSHALL PUBLIC SCHOOLS
2010-2011 BUDGET OVERVIEW
REVENUES
09-10 Actual
---------------$21,571,254
10-11 Budget
----------------$21,328,800
Foodservice
$1,193,314
$1,176,348
-1.4%
Transportation
$1,015,921
$969,455
-4.6%
Community Services
$1,910,168
$2,260,891
18.4%
$684,701
$755,723
10.4%
$3,025,190
$2,783,659
-8.0%
$29,400,548
$29,274,876
-.4%
General Fund
Capital Outlay
Debt Service
Total
% Change
-------------1.1%
MARSHALL PUBLIC SCHOOLS
2010-2011 BUDGET OVERVIEW
EXPENDITURES
09-10 Actual
---------------$21,233,536
10-11 Budget
----------------$20,535,041
% Change
-------------3.3%
Foodservice
$1,151,763
$1,170,951
1.7%
Transportation
$1,017,177
$1,014,636
-.2%
Community Services
$1,943,538
$2,305,474
18.6%
$586,425
$805,895
$2,925,934
$3,046,911
$28,858,373
$28,878,908
General Fund
Capital Outlay
Debt Service
Total
37.4%
4.1%
.07%
General Fund Expenditures
June 30th, 2010
Fiscal and Other Fixed Cost
Programs
Site, Buildings, and
0%
Equipment
District and School Admin
10%
5%
District Support Services
Pupil Support Services
3%
4%
Instructional Support Services
6%
Exceptional Instruction
21%
Vocational Instruction
2%
Regular Instruction
49%
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
2009-10
Actual
2010-11
Budget
09-10 vs 10-11
Percent Change
11.00
11.00
0.0%
163.00
24.00
2.00
159.00
27.00
2.00
-2.5%
12.5%
0.0%
35.00
87.00
21.00
35.00
83.00
20.00
0.0%
-4.6%
-4.8%
343.00
337.00
-1.7%
ISD #413 - MARSHALL GENERAL FUND
EXPENDITURES JUNE 30, 2010
Equipment
1%
Supplies and Materials
3%
Other Expenditures/Transfers
1%
Purchased Services
10%
Salaries and Wages
Employee Benefits
Purchased Services
Supplies and Materials
Equipment
Other Expenditures/Transfers
Employee Benefits
22%
Salaries and Wages
63%
ISD #413-Marshall-General Fund % Of
Expenditures By Object
80%
70%
60%
50%
Salaries and Wages
Employee Benefits
Purchased Services
40%
Supplies and Materials
Equipment
30%
Other Expenditures/Transfers
20%
10%
0%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
ISD 413, Marshall
ISD #413 - MARSHALL - CHANGE IN GENERAL FUND INSTRUCTION EXPENDITURES SINCE 2001
80.00%
70.00%
60.00%
50.00%
Regular & Vocational Instruction
40.00%
Exceptional Instruction
30.00%
20.00%
10.00%
0.00%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
ISD #413, Marshall
ISD #413 - MARSHALL - GENERAL FUND EXPENDITURES BY PROGRAM
$12,000,000
$10,000,000
2002
$8,000,000
2001
2003
2005
$6,000,000
2004
2006
2007
2009
$4,000,000
2008
2010
$2,000,000
$0
Fiscal and Other Fixed
Cost Programs
Site, Buildings, and
Equipment
Pupil Support Services
Instructional Support
Services
Exceptional Instruction
Vocational Instruction
Regular Instruction
District Support Services
District and School
Admin
ISD #413, Marshall
ISD #413 - MARSHALL - GENERAL FUND
% OF EXPENDITURES BY PROGRAM
80%
70%
60%
50%
Administration
Instruction
40%
Support Services
Site, Buildings, and Equipment
Fiscal and Other Fixed Cost Programs
30%
20%
10%
0%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
ISD #413 Audit Highlights
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The audit results for 2009-2010 showed an ending
General Fund balance of $2,128,733 or 10.01% of
expenditures.
The Transportation Fund showed a positive ending
fund balance of $19,351 after a Fund 01 transfer.
The Capital Outlay Fund ended with a balance of
$616,342 exceeding the established goal of $400,000
by a goodly amount.
The Foodservice Fund ended with a much better
ending fund balance than projected.
The Debt Service Fund balance provides good cash
flow for the District and allows us to under-levy.
2010-2011 Expenditure Budget Makeup
11%
3%
8%
3%
General
4%
Foodservice
Transportation
Community Services
Capital Outlay
Debt Service
71%
ISD #413, Marshall


The Revised General Fund Budget for 20102011 shows a $793,759 excess in revenues
over expenditures. This is due to the Federal
ARRA Stimulus and Edujobs one-time funding
This translates into a $2,922,492 ending fund
balance or a 14.23 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?
ISD #413 - MARSHALL - GENERAL FUND
REVENUES BY SOURCE
$18,000,000
$16,000,000
$14,000,000
$12,000,000
Local Property Tax Levies
$10,000,000
Other Local and County Revenues
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
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
General Fund Revenue Sources
by Percent
ISD 413, Marshall
General Fund Changes in Basic per Pupil Allowance
Year
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
Total Change Per Pupil
Total Basic Allocation
$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
$1,543
Percent Change
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%
43.09%
ISD #413 - MARSHALL
FUND BALANCE/CASH BALANCE ANALYSIS
GENERAL FUND
$2,500,000
$2,000,000
$1,500,000
$1,000,000
FUND BALANCE-ENDING
ADJUSTED CASH BALANCES
$500,000
$0
($500,000)
($1,000,000)
($1,500,000)
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Proposed 2011 Property Tax
Levy
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
Determination of levy
Comparison 2010 to 2011 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 send out bills, collects taxes from
property owners, and distributes funds back
to other taxing jurisdictions
School District Property Taxes

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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
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.
New OPEB funding is included in this category.
ISD 413, Marshall
How are the Proposed 2011 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:
$2,601,978
$153,844
$2,958,616
$5,714,438
Pay 2010/Pay 2011 Levy Comparison
Fund
09 Pay 10
General
2,583,285.95 2,601,978.70
Community
Service
General Debt
Service
OPEB Debt
Service
Total
10 Pay 11
Increase
% Change
18,692.75
.72%
17,701.34
13.00%
2,641,095.84 2,820,498.90 179,403.06
6.79%
136,142.35
153,843.69
129,239.00
138,117.00
8,878.00
6.87%
5,489,763.14
5,714,438.29
224,675.15
4.09%
2011-2012 Tax Levy Spending
General Education
45%
Debt Service
52%
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
2009
2009
2009
13,685,571
86.1%
15,894,972
FY 2012
0.0%
2009
0.00
2011-2012
Pay 2011
2512.44
5,124.00
12,873,742.56
(7) Basic General Education Aid Revenue
FY 2012
12,873,742.56
(8) General Education Aid Percentage
FY 2012
100.0%
AMCPU
Formula Allowance
(6) Basic General Education Revenue
ISD 413, Marshall
District #413 Proposed Property Tax Stmt. for 2011
Actual 2010 Property Tax
Voter Approved Levies
$3.955,994.19
Proposed 2011 Property Tax
$4,174,816.66
Other Local Levies
$1,533,768.95
$1,539,621.63
School District Total
$5,489,763.14
$5,714,438.29
ISD 413, Marshall
The School District Levy is
increasing by:
$224,675.15
or
4.09%
ISD #413


However, because of an almost 12% increase in our
2009 Adjusted Net Tax Capacity, even with the levy
increase, chances are your property tax bill for school
purposes will not increase and, in fact, maybe
decrease some for pay 2011 if your property value
remained constant or decreased.
Each property taxpayer’s situation is different so
please check your own individual truth in taxation
statement.
Tax Levy History
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1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Pay
Pay
Pay
Pay
Pay
Pay
Pay
Pay
Pay
Pay
Pay
Pay
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
$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
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
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 Credit
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
2011
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)







Has existed since the 1970’s
Available to all owners of homestead property
Annual income must be approx. $91,000 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 $1,700
Especially helpful to those with lower incomes
Fill out state tax form M-1PR
State Property Tax Refunds
Special Property Tax Refund




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





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
$2,601,978.70
$153,843.69
$2,958,615.90
$5,714,438.29
Now Therefore, Be it resolved by the School Board of Independent School
District No. 413, Marshall, Minnesota, that the amount to be levied in 2010
to be collected in 2011is set at $5,714,438.29. The clerk of the Marshall
School Board is authorized to certify the proposed levy to the County
Auditor of Lyon County, Minnesota.
Next Steps


Tonight-Board will accept public
comments and questions on proposed
levy
December 20th-Board will conduct
subsequent hearing (if necessary) and
certify final amount of tax levy payable
in 2011
ISD 413, Marshall

Public Comments and
Questions
THE END
THANK YOU FOR
ATTENDING!