Setting The Tax Rate Sponsored by: MASA & MoASBO Presenter: Chris Straub

Today's Agenda Lunch Overview State Auditor Forms State Assessed Railroad & Utilities & Proposition C Rollback Senate Bill 711 Implications Conducting a Tax Rate Hearing and Public Notice Additional School Finance Assistance

State Auditor Forms Some items pre-printed: Tax Rate Summary Page Line A - Prior Year Tax Rate Ceiling Line C1 - Tax Rate Ceiling at the time of the election Line E - Maximum Authorized Levy

State Auditor Forms Form A: Line 5 – Prior Year Assessed Valuation Line 10 – Increase in CPI Line 12 – Prior Year Tax Rate Ceiling Line 14 – Maximum Prior Year From State Assessed

XYZ School District Assessed Value Notice From ABC County Clerk Real Estate - Residential$3,700,000 Real Estate - Agricultural$1,600,000 Real Estate - Commercial$2,400,000 Personal Property$2,000,000 Railroad and Utility Local Real Estate$500,000 Local Personal$100,000 Total$10,300,000

New Construction and Improvements: Related to Real Estate$202,000 Related to Personal Property$90,000 XYZ School District Assessed Value Notice From ABC County Clerk

State Auditor Forms Form A 1. Current Year 2008 Assessed Valuation (a) 8,200,000 + (b) 2,100,000 = $10,300,000 (Real Estate) (Personal Property) Real Estate - Residential$3,700,000 Real Estate - Agricultural$1,600,000 Real Estate - Commercial$2,400,000 Personal Property$2,000,000 Railroad and Utility Local Real Estate$500,000 Local Personal$100,000

State Auditor Forms Form A 5. (Pre-printed) Prior Year 2007 Assessed Valuation (a) 8,000,000 + (b) 2,000,000 = $10,000,000 (Real Estate) (Personal Property) 1. Current Year 2008 Assessed Valuation (a) 8,200,000 + (b) 2,100,000 = $10,300,000 (Real Estate) (Personal Property) 2. Assessed Valuation of New Construction and Improvements (a) $202,000 + (b) = ___________ (Real Estate) (Personal Property)

State Auditor Forms Form A 5. (Pre-printed) Prior Year 2007 Assessed Valuation (a) 8,000,000 + (b) 2,000,000 = $10,000,000 (Real Estate) (Personal Property) 1. Current Year 2008 Assessed Valuation (a) 8,200,000 + (b) 2,100,000 = $10,300,000 (Real Estate) (Personal Property) 2. Assessed Valuation of New Construction and Improvements (a) $202,000 + (b) $100,000 = $302,000 (Real Estate) (Personal Property)

State Auditor Forms Form A 4. Adjusted Current Year Assessed Valuation ($10,300,000 - $302,000)$9,998, Adjusted Prior Year Assessed Valuation $10,000,000

State Auditor Forms Form A 9. Percentage Increase in Adjusted Valuation (9,998,000-10,000,00) ÷10,000,000 = -.02% 10. (Pre-printed) Increase in Consumer Price Index 3.9% 11. Adjusted Prior Year Assessed Valuation $10,000, (Pre-printed) Prior Year Tax Rate Ceiling $4.00

State Auditor Forms Form A 13. Maximum Prior Year Adjusted Revenue from Locally Assessed Property (10,000,000 X 4.00) ÷ 100 =$400, (Pre-printed) Maximum Prior Year Revenue from State Assessed Property$100, Total Adjusted Prior Year Revenue (400, ,000) = $500,000

State Auditor Forms Form A 16. Permitted Reassessment Growth 0% 17. Additional Reassessment Revenue Permitted (500,000 x 0%) = $0 18. Total Revenue Permitted in the Current Year $500, Total Adjusted Prior Year Revenue (400, ,000) = $500,000

State Auditor Forms Form A 19. Estimated Current Year Revenue from State Assessed Property (before reductions) (See State Tax Commission Report) $100, Revenue Permitted from Existing Locally Assessed Property (500, ,000) = $400, Total Revenue Permitted in the Current Year $500,000

State Auditor Forms Form A 20. Revenue Permitted from Existing Locally Assessed Property $400, Adjusted Current Year Assessed (Line 4) $9,998, Maximum Tax Rate Permitted by Article X, Section 22 and Section RSMo (400,000 ÷ 9,998,000) x 100 = $4.0008

State Auditor Forms Form A 22. Maximum Tax Rate Permitted by Article X, Section 22 and Section RSMo (400,000 ÷ 9,998,000) x 100 = State Auditor Forms Summary Page B. Current Year Rate Computed (Because this is less than the maximum authorized levy of 4.02 the tax rate ceiling does increase from to )

State Auditor Forms Form B If voters approved a levy increase in your district since September 1, 2007, you will need to complete Form B.

State Auditor Forms Form B 1. Date of Election 2. Amount of Increase Approved by Voters OR State Rate Approved by Voters 3. Ballot language 4. Election Results 5. Expiration Date if any 6. Proposition C Waiver

State Auditor Forms - Form C Applicable it district has an active Debt Service fund. 1. Total current year assessed valuation$10,300, Amount required to pay debt service requirements during the next calendar year (Jan 08 - Dec 08)$50, Estimated costs of collections and anticipated delinquencies$2, Reasonable reserve up to on year's payment$45, Total required for debt service$97, Anticipated balance at end of current calendar year$25, Property tax revenue required for debt service$72, Estimated revenue from state assessed property for debt service for the next calendar year (Jan 08 - Dec 08)$5, Revenue required from locally assessed property for debt service$67,000

State Auditor Forms Form C 9. Revenue required from locally assessed property for debt service$67, Computation of debt service tax rate (67,000 ÷ 10,300,00) x Less Voluntary Reduction By School District Actual rate to be levied for debt service purposes.6000 State Auditor Forms Summary Page AA. Rate to be Levied for Debt Service.6000

State Auditor Forms Summary Page Complete rest of Summary page if: Election held since Sept (Line C-2) Line B is less than 2.75 AND Board of Education adopts Resolution to raise levy to $2.75 (Amendment 2) Proposition C is not waived (Line G)

Senate Bill 711 Implications 1. In 2009, reassessment affects the actual operating levy in addition to the tax rate ceiling for school districts using a voluntary tax reduction in (Line H Tax Rate Summary Page) 2. Operating levy increases voted after September 1, 2008 will be subject to reassessment adjustment in Small schools grant change ($3.43)

Other Items To Complete Proposition C Worksheet Public Notice of Hearing Requirement Public Hearing Board of Education votes to set tax rate Send State Auditor forms and statement of required local taxes to appropriate County Clerks Process must be completed by Sept. 1 Amend budget with Board if appropriate

Questions?

Voter Approved Tax Rate Issues If your district has a $2.75 tax rate, do you know why? Example: Tax rate ceiling is $3.00 with a 50-cent Proposition C rollback interrupted at $2.75.

Possible Scenario District with a $3.00 tax rate ceiling with a 50¢ Proposition C rollback interrupted at $2.75 needs a 50¢ levy increase. District must ask citizens to increase tax-rate ceiling to $3.75. ( ¢ Prop C Rollback = $3.25) OR

Possible Scenario District must ask citizens to increase tax-rate ceiling to $3.25 and fully waive Prop C rollback.

New Requirement Effective August 28, 2007 District will be required to show additional revenue from new construction and reassessment separately. District will also be required to show percent of additional new revenue from reassessment.

New Requirement Effective August 28, New Revenue: New A.V. x Tax Rate. minus Old A.V. x Tax Rate (10,300,000 x ) ÷ 100 =$412,082 (10,000,000 x ) ÷ 100 =$400,000 New Revenue$12,082

New Requirement Effective August 28, New Revenue:$12, Revenue from New Const. & Improv. A.V. from New Const. x Tax Rate ÷ 100 (302,000 x ) ÷ 100 = $12,082

New Requirement Effective August 28, New Revenue:$12, Revenue from New Const.$12, Revenue from Reassessment: New revenue - revenue from New Const. 12,082 – 12,082 = 0

New Requirement Effective August 28, New Revenue:$12, Revenue from New Const.$12, Revenue from Reassessment: 0 4. Percent Increase from Reassessment: Rev. from Reassessment ÷ Old Rev. x 100 (0÷ 400,000) x 100 = 0%

Questions? Additional Assistance: MASA School Finance Consultants Bob PhillipsRandy Winston Allan CraderLeRoy Huff Bill RayBill Rebore Call Roger Kurtz at MASA to arrange visit