LOCKPORT CITY SCHOOL DISTRICT Budget Development Process for An Overview of the New Property Tax Cap Presented by Michelle T. Bradley Superintendent of Schools October 2011

2 History of the Property Tax Cap January 28, 2011 – Governor Cuomo submitted property tax cap legislation January 31, 2011 – Property tax cap legislation passed by Senate June 24, 2011 – The property tax cap was signed into law

3 What is the Property Tax Cap establishes a limit on the annual growth of property taxes levied by local governments and school districts to two percent or the rate of inflation, whichever is less limits the total levy, not assessed value or tax rate begins with the school year in effect through at least there are exclusions to the cap, allowing districts to levy an additional amount for these expenditures an override of the tax levy limit is permitted

4 School District Exclusions from the Levy Limit Include: Employer contributions to Employees’ Retirement System in excess of two percentage points Employer contributions to the NYS Teachers’ Retirement System in excess of two percentage points Expenditures resulting from court orders or judgments exceeding five percent of the prior year tax levy Support of local portion of capital expenditures

Sample Tax Levy Limit Calculation Determine the total amount of taxes levied in the prior fiscal year $5,000,000 Multiply total amount of taxes levied for prior year by the growth factor X 1.01 $5,050,000 Add any PILOTS receivable in the base year+$100,000 $5,150,000 Subtract the tax levy necessary to support exclusions-$200,000 Adjusted Prior Year Levy$4,950,000 Multiply the adjusted levy by the allowable levy growth factor (1.00 plus the lesser of CPI or 2%) X 1.02 $5,049,000 Subtract any PILOTS receivable in the coming year-$100,000 =$4,949,000 Add any available carryover from the prior fiscal year+ $0 TAX LEVY LIMIT (voter authorization)=$4,949,000 Add Coming School Year Exclusions+ $125,000 MAXIMUM ALLOWABLE LEVY (tax bill)$5,074,000 ADJUSTMENT ADJUSTMENTS ALLOWABLE LEVY A D J U S T M E N T S ^ ^

6 Information Still Needed Tax Base Growth Factor (released February 15 th ) Prior Year Exemptions (still being discussed between SED and OSC) CPI # (released late January/early February)

7 Final Points will vary by district future updates –Information being provided will be updated frequently – initially, the guidance is for local governments that will be the first to develop budgets under new law (those that operate on a calendar year fiscal year) and will be updated in the future to provide information and guidance to school districts whose fiscal years do not coincide with the calendar year trying to discover what legislation means to LCSD so that we know how to build the budget for school districts are responsible for reporting information necessary for calculating the limit to the State Comptroller, the Commissioner of Education, and the Commissioner of Tax and Finance by March 1 of each year

8 Next Steps Budget Timeline Highlights October/November –Budget development calendar is presented to the Board of Education –Budget forms are distributed to building principals and directors December –Central Administration Office continues budget development by working with budget builders (program and building staff) –Program budgets are submitted to the Business Office January –The Board reviews the Governor’s proposed state aid printouts sent by SED February/March –The Business Office reviews and projected account codes for the three- part budget presentation format and makes necessary adjustments and transfers –Revenue estimates are presented to the Board –Submit property tax cap calculation by March 1 April –Public notice of the school district budget vote is posted –The Budget is finalized and adopted by the Board May –The Budget Hearing (at least 7 and no more than 14 days prior to vote) –Budget Notice mailed to voters –Statewide School District Budget and Board Member Election vote