Tax Cap Limit 2013-2014

1. Tax Cap Limit2013-2014 Can it be greater than 2%?

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.

3. 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.

4. 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%)

5. Tax Cap Calculations Tax 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.

6. 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

7. 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

8. Exclusions Some Court Orders/Judgments: Some Local Capital Costs: Some Pension Contribution Costs:

9. Exclusions • Court Orders/Judgments: $0 • Capital Tax Levy: $0 • Pension Exclusions: • ERS: $0 • TRS: $360,735 • Total Exclusions: $360,735

10. What does it mean? Tax Levy Limit: $12,139,392 Total Exclusions: $360,735 Tax Levy Limit plus Exclusions: $12,500,127 Percent Increase: = ($12,500,126-$11,712,882)$11,712,882 = 6.72%

11. 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

12. Questions