Transcript Finance 101

Community Meeting
May 31, 2012
Agenda:
7:00 – 8:00
Topics to include:
• An overview of the “foundation funding” system of the
past several years . (Mr. Samples)
• Local Funding – determining the market and assessed
values (Mr. Ewers)
• Understanding Inside/Outside millage and the impact
of CAUV (Mr. Samples)
• The approximate cost of the district’s proposed
combination levy (Mr. Ewers)
• A review of the 5 year forecast requirement (Mr. Samples)
• Questions related to previous meeting (Mr. Ewers and Mr. Samples)
•Enrollment numbers
•Spending for Gifted Education
•Special Education funding
•A county wide comparison
8:00 – 8:30 Questions from the presentation
Foundation Funding
Foundation Level
$
State
Aid
Local tax
Charge-Off
at
22 mills
Wealth
Property Value per Student
The basis of the foundation formula, the Evidence based model AND the BRIDGE
formula
BRIDGE Formula
What is it?
“A distribution methodology”
– Asst. Policy Director for Education, Office of the Governor
“A transitional approach until a new formula is devised.. The … formula
Provides for a simplified approach to fund distribution based on FY 11
Total calculated amounts on a per pupil basis”
- Ohio Department of Education
BRIDGE Formula
What is it?
A method to distribute State Aid based upon 2010-11 levels of funding
To districts. It is intended to be adjusted by current year enrollment, and
Includes a reduction amount per pupil to keep total State Aid within the
Present amounts of funds,
Important points to keep in mind about the basis of the BRIDGE formula
•
•
•
Funding for FY 11 was based upon enrollment taken in Oct. of 2009;
Individual districts increases in FY 10 and FY 11 were limited to .25%
of whatever the district received in FY 09 (school year 2008-09)
Individual districts decreases in FY 10 were limited to -1% of whatever the
district received in FY 09 and to -1% of whatever the district received
in FY 10
Local Funding
Property tax types:
General Property – a tax levied on land and buildings – real
estate or real property
Tangible Personal Property - paid for by public utility companies
Real Property divided into four classes:
1. Residential
2. Agricultural
3. Commercial
4. Industrial
Funding issues – Real property is taxed at a reduced rate
•Residential and Agricultural are “Class I” millage rate
Local Funding
Key Terms: Sale Value, Assessed Value and Reappraisal
• Sale Value = True value = Market value (only what someone would pay)
•Assessed Value = Taxable Value
•Reappraisal = The process of determining the assessed value
Assessed Value:
1. A set % of true value is actually taxed
2. State of Ohio has set the percentage at 35% of market value
Example - $100,000 = market value
- Assessed value = $35,000
Local Funding
Rollback reduction factors (HB 920):
• The state reduces taxpayer obligation by 12.5% on owner
occupied real estate
• The State reduces taxpayer obligation by 10% on agricultural
and non-owner occupied real estate
Millage:
•Definition 1 mill = .1 cent = $.001 = 1/10 of a cent
•Tax rate on property is always computed in mills
•1 mill = 10 cents of tax income per $100 of property value
$1.00 in tax income per $1000 of property value
$1000 in tax income per $1 million of property
value
Local Funding
Millage Example
Market Value
$100,000
Assessment Rate
x 35%
Assessed Value
$35,000
Millage Rate
0.001
Taxes Levied
$35.00
Rollback Reduction*
x .875
Net Taxes Levied
$30.62
*12.5% for owner occupied residential real estate
Local School Funding Issues
“Inside Mills / “Outside Mills”
• In Ohio, every property owner pays no more than 10 mills of
“inside mills
• Inside mills are non-voted tax rates allowed by the Ohio
Constitution ( the average for Ohio Schools is 4.6 mills)
Inside millage is not affected by HB 920
•Outside mills are any millage above the 10 inside and they are
voted by the people
Outside millage is affected by HB 920
Local School Funding Issues
Reappraisal process:
• Once every 6 years auditor actually visits the property.
Auditor must estimate the property’s “true” value.
• Three year triennial update is determined by the sales of
property. If sale values increase or decrease, market value
will reflect the same
• New construction is added to the list as it is appraised
50% of value when walls are up
100% upon occupancy
Williams county “Reappraisal” in 2012 – Triennial in 2015
Local School Funding Issues
The 20 Mill “Floor”
• Only current expense millage (inside and outside) counts toward the
20 mill floor.
• Once a district reaches the “Floor” it receives full growth on those 20
mills.
•i.e., HB 920s tax reduction factors do NOT apply
Impact of CAUV
Current Agricultural Use Valuation (CAUV)- This is land devoted exclusively
to commercial agricultural use may be valued according to current use
instead of “highest and best” use.
• land of more than 10 acres may be placed in CAUV.
•All land is categorized into one of 4 categories regardless of what is grown on
the land.
A review of CAUV rates had not been conducted since 1984.
Questions from previous meetings:
Enrollment numbers:
•2003 enrollment presented in Jan. as part of 10 year trend was
incorrect.
• Decline in enrollment trend is still accurate.
• Projection of having 40 students in classes in grades 7-12 core classes.
•2012-13 has only 2 core courses with a class size greater than 25
(both Jr. High and could still be balanced)
• 2012-13 Core class averages 7-12
Math = 17 per teacher
Language Arts = 18 per teacher
Science = 16 per teacher
Social Studies = 19 per teacher
Questions from previous meetings:
Spending on Gifted Funding:
• We must spend same amount as we did in 2009 per funding formula.
• We have two options, maintain our ESC services or spend same
amount of money. Currently we spend approximately $20,000 by
maintaining the service through the ESC. Otherwise, we would
have to spend approximately $40,000 to spend at the 2009 level.
Special Education Funding:
• Per the funding formula, funding is flat line. We receive a flat fee
for students with special needs as opposed to the weighted
funding. By reducing percentage on salaries, we can spend revenue
on services and supplies instead.
Questions from previous meetings:
Comparable numbers to other county schools:
• Teacher to student ratio and numbers of teachers in specific subject areas
•Many factors play into this factor. (negotiated agreement, seniority,
political environment)
•Perhaps the most significant is the comparison in local support for
each school.
• Taxpayers in the Edon School District pay the least amount of any
other taxpayer in the county using comparable data.