Budgets and Mill Levies How they work together…

Make this YOUR session! Stop me and ask specific questions at any time during the presentation. Help me meet your expectations on what topics need to be addressed here today.

Budgets and Mill Levies Budgets and Mill Levies are two separate calculations. An honest and accurate budget should be presented prior to establishing a mill rate. You need to estimate what a mill can produce to help prepare a budget. Your budget should NOT be set simply by using the maximum number of mills allowed.

Gross dollar budgeting A budget request should include all costs associated with a department or subdivision. If your entity must pay 100% of a project to receive 80% grant reimbursement upon completion, the entire cost of the project must be included in the budget request. The reimbursement should be included in the estimated revenues for that budget.

A levy is a calculated need for funding Approved budget100,000 Reserve ( up to 75%) 75,000 Total appropriation175,000 Less: Estimated cash balance 40,000 Estimated revenue 20,000 60,000 Amount required from mill levy115,000

Ad valorem tax (according to value) A mill is an amount of tax per thousand currency units of property value. To determine the mills required for this request: $115,000 divided by 21,502,211 total taxable for the entity = as a per thousand becomes spoken as 5.34 mills

…Ad valorem tax The calculation may be reversed to determine tax costs for a property. Taxable value = true & full value x 50% x 10% (or 9% for residential property) Mill rate stated as (shift decimal three spaces to the left for calculation) x 3675 taxable value = $ tax due

Maximum mill levies limitations.pdf limitations.pdf The publication provides: A list of levies available NDCC references Remarks regarding acceptable uses for the levy General Fund may be used to support special revenue funds How the maximum levy may be reached by resolution or by vote of electors

North Dakota Century Code Use resources available to understand law that governs the levy being used. code.html code.html

Maximum mill levy worksheet 2012 value increase due to equalization, detailed soils, capitalization rate change taxpayers’ response to notices increase to tax levy in hands of local governing bodies

…Maximum Mill Levy Worksheet Begins with base year tax, which is the largest amount of dollars levied in the last three years. Loss of property value may allow levies to become higher than NDCC maximum allows entities to continue to levy amount required to provide services as valuation is lost

…Maximum Mill Levy Worksheet New property valuation new taxable value added to the base year may generate more levy dollars new taxable value added to the base year may reduce the calculated mill levy

…Maximum Mill Levy Worksheet County Of ____________________ Maximum Levy Worksheet - For Tax Years Beginning With 2010 Taxing District __________ Fund _____________________ Tax Year _________ 1. Taxes levied in the last three years (Final levy from Maximum Levy Worksheets): a. last year $ _______, b. two years ago $ ________, c. three years ago $ _________ 2. Base year taxes levied (item 1a, 1b, or 1c, whichever is greatest) $ _________ 3. Temporary increased or excess levies in effect for the base year but now expired $ ________ 4. Base year taxes excluding expired levies (line 2 minus line 3) …… $ ________ 5. Base year taxable value of taxable and exempt property $ ________ 6. Calculated mill rate for taxes levied in the base year (line 4 divided by line 5) ________ 7. Taxable value of taxable and exempt property which was in the taxing district in the base year and is not in the current year $ ________

…Maximum Mill Levy Worksheet 8. Adjustment for property no longer in the taxing district (line 6 times line 7)..$ ________ 9. Taxable value of taxable and exempt property which was not in the taxing district in the base year $________ 10. Adjustment for property added to the taxing district since the base year (line 6 times line 9) $ ________ 11. Adjusted base year levy (line 4 minus line 8 plus line 10) …………………..$ ________ 12. Current year taxable value of taxable property $ __________ 13. New, increased, or excess levies in mills authorized by the legislature or the electors __________ 14. New, increased or excess levies (line 12 times line 13)..... $__________ 15. Base year levy plus increased levies (line 11 plus line 14) …………………..$________

…Maximum Mill Levy Worksheet 16. Maximum mills otherwise provided by law including increased or excess levies approved by the voters _________ 17. Maximum levy otherwise provided by law (line 12 times line 16)....$ ________ 18. Allowable total maximum levy (line 15 or line 17, whichever is greater) ……………………………………………………… $ ________ 19. Levy certified by the taxing district for the current year $ ________ 20. Final levy (line 18 or line 19, whichever is less) $ ________ 21. Final mill rate (line 20 divided by line 12) _______ mills

…Maximum Mill Levy Worksheet Budgets/tax levy must be set on or before the October meeting (NDCC ) Final levy calculated cannot be larger than levy certified by taxing district Forms and instructions available at

Budget management Expenditures beyond the approved budget must be handled by an amendment amendments made after end of fiscal year not required for each line item of fund determined by bottom line of fund, budget to expense percentage include amount of January expenses that were incurred prior to end of previous year must be approved and recorded in minutes

Budget management Once expended, revenue returned to fund does not return to the balance of the budget Revenue was estimated in determining initial budget Unexpected revenue may be used to support special requests and budget amendment documentation Unused appropriations become part of a fund balance used to determine budget and levy needs for future years

Budget management & levies Proper preparation and management of budgets allows clear explanation of use of taxpayer funds helps to provide fund managers accurate information regarding fiscal responsibilities can reduce concerns expressed about misuse of mill levy maximums

Budgets and Mill Levies Be prepared to change ND Legislature meets biannually Online resources are available to everyone Be familiar with your budget and levy requirements Ask questions. There is a wealth of information in the North Dakota county network. We all continue to learn together.