BUDGET / LEVY CYCLE

Williamsville C.U.S.D. #15Dave Root, Superintendent

October 22, 2007

Property Tax Assessment / Budgeting / Levy Cycle

How is property assessed? When and how do you use that

information to establish a levy? How the tax rate is calculated and

how that relates to the budget.

Budget / Levy Calendar

May -Amend the 2007-2008 budget

June -Finalize staffing, refine projected receipts and disbursements.

July -Provide 2008-2009 Preliminary Budget to Board of Education.

August -2008-2009 Tentative Budget approved for public display.

September -Hold Public Hearing on 2008-2009 Budget. -Adoption of the 2008-2009 Budget by the Board of Education

Oct. / Nov. -Provide Updated Financial Projections.

December -Hold Public Hearing / Adoption of 2008 Levy.

What is a school district budget?

Illinois law requires school districts to budget its income and expenses each year and to make the budget available for public inspection before final adoption.

The annual budget serves two major purposes:

Represents a planRepresents a plan for receiving and expending money.

Provides informationProvides information necessary to determine the amount of school taxes that must be levied on property.

How is school income determined?

Four major factors determine the amount of money available: - - Property ValuesProperty Values - - Tax RatesTax Rates

- State Appropriations- State Appropriations- Pupil Enrollment- Pupil Enrollment

(ADA)

HISTORY OF E.A.V.’S

1997 $69,770,772 5.0%

1998 $75,356,984 8.0%

1999 $80,100,328 6.3%

2000 $83,790,557 4.6%

2001 $85,883,370 2.5%

2002 $89,650,329 4.4%

2003 $95,028,615 6.0%

2004 $97,613,426 2.7%

2005 $104,711,089 7.3%

2006 $112,500,579 7.4%

ESTIMATE OF 2007 E.A.V.

20072007

$120,000,000$120,000,000

(Represents at least an 7-8% increase)(Represents at least an 7-8% increase)

HISTORY OF TAX RATES

2001 2002 2003 2004 2005 2006           

$85,883,370 $89,650,329 $95,028,615 $97,613,426 104,711,089 112,500,579

           

2.6000 2.6000 2.6000 2.6000 2.6000 2.6171

0.5000 0.5000 0.5000 0.5000 0.5000 0.5017

0.2000 0.2000 0.2000 0.2000 0.2000 0.2007

0.1842 0.1952 0.1842 0.1793 0.1671 0.1464

0.0263 0.0279 0.0263 0.0256 0.0239 0.0209

0.0500 0.0500 0.0500 0.0500 0.0500 0.0471

0.1747 0.1673 0.1578 0.1537 0.1433 0.1254

0.0500 0.0500 0.0500 0.0500 0.0500 0.0510

0.0400 0.0400 0.0400 0.0400 0.0400 0.0402

0.9390 0.9459 0.9389 0.9548 0.9380 0.9138

4.7866 4.7763 4.7472 4.7534 4.7123 4.6643

YR

EAV

Ed

OM

TNs

IMRF

SS

WC

TORT

FPS

Spec. Ed

Bonds

Total

HISTORY OF ENROLLMENT

YEAR Enrollment

2001 1236

2002 1286

2003 1276

2004 1298

2005 1368

2006 1395

2007 1368

*A decrease in A.D.A. equals less G.S.A.

School District Funds

Major Operating FundsEDUCATIONAL FUNDEDUCATIONAL FUNDOPERATIONS / MAINTENANCE FUNDOPERATIONS / MAINTENANCE FUNDTRANSPORTATION FUNDTRANSPORTATION FUND

Special Purposes Funds BOND BOND AND INTEREST FUNDAND INTEREST FUND ILLINOIS ILLINOIS MUNICIPAL RETIREMENT/SOCIAL SECURITY FUNDMUNICIPAL RETIREMENT/SOCIAL SECURITY FUND WORKING CASH WORKING CASH FUNDFUND SITE AND SITE AND CONSTRUCTION/CAPITAL IMPROVEMENT FUNDCONSTRUCTION/CAPITAL IMPROVEMENT FUND FIRE FIRE PREVENTION/LIFE SAFETY FUNDPREVENTION/LIFE SAFETY FUND RENT FUNDRENT FUND

Sample Budget Calendar

March/April - Capital Outlay / Supply Budget Requests

May/June - Finalize staffing, refine projected revenues and expenditures.

July - Provide preliminary budget information to the Board of Education.

August - Tentative Budget approved for public display. - Hold Public Hearing on Budget.

Sept. - Adoption of Budget by Board of Education.

Revenue Source of Funds for Schools

Statewide AverageStatewide Average WilliamsvilleWilliamsville

Local 55%State 36%

Federal 9%

Local 58%

State 41%

Federal 1%

REVENUE BY FUND (Average)

EDUCATION 79.9%

BUILDING 9.8%

TRANSPORTATION 6.3%

IMRF 2.8% SAFETY 0.6%

W/CASH 0.6%

EXPENDITURES BY FUND(Average)

EDUCATION 80.7%

BUILDING 9.5%

TRANSPORTATION 4.9%

IMRF 2.7%SAFETY 2.2%

REVENUE CONSTRAINTS - FIXED

Individual Fund Tax Rate Limits

Property Tax Limitation Act (Tax Cap)

General State Aid Formula

REVENUE FACTORS - VARIABLE

Student / User Fees Tax Extensions within authorized limits

Bonds (Funding, Working Cash, etc.) Tax Rate referendum question

Revenue Factors Affecting the Future

E.A.V. Growth Inflation Interest Rates State Funding Federal Funding

The CumulativeCumulative Effect Effect

State Revenue Shortfall Tax Caps Property Reclassification Growing Expenditures

State Revenue Shortfall

Unrestricted State Aid -General State Aid

-ADA Block Grant Restricted State Aid (Categoricals) -

Prorated/Elimination of funding*Special Education

*Transportation*Bilingual

*Gifted/Reading Improvement *Early Childhood

EXPENDITURE FACTORS - FIXED

Collective Bargaining Agreements - Salaries - Benefits - Class size

State / Federal Mandates Debt Service Outstanding

EXPENDITURE FACTORS - VARIABLE

Personnel (staffing level) Program Commitments/Standards

- Technology - Drivers’ Education- Athletics - Electives

- Activities - GraduationRequirements - Summer School - Alternative

Schools - Advanced Placement

EXPENDITURE FACTORS - PROJECTED

Minimal / Moderate Inflation Growth(Salaries, Benefits, Purchased Salaries, Supplies, Capital Outlay)

Early Retirement Costs / Savings Student Enrollment Growth / Decline Program Mandates (state, federal) Declining Fund Balances

PROPERTY TAXES

Property tax is the largest single tax in Illinois and is the major source of revenue for school districts.

The process of imposing the property tax has two distinct parts: 1) A 1) A value must be placed on property (assessment).value must be placed on property (assessment).

2) 2) The tax is imposed on that value or as a The tax is imposed on that value or as a

percentage.percentage.

PROPERTY TAX BURDEN BY TYPE OF PROPERTY

Averages for Central IllinoisAverages for Central Illinois

FARM 58.6%

RESIDENTIAL 34%

COMMERCIAL 5%

RAILROAD 0.97%

INDUSTRIAL 1.4%

PROPERTY VALUES

Illinois real property values and related taxes are established on a calendar-year basis.

Property assessment for the 2007 calendar year provide the basis for property tax revenues distributed in calendar year 2008

State-directed equalization factors (multiplier adjustments) are designated to assure equal valuation treatment across Illinois’ 102 counties.

Equalized Assessed Valuations (EAV) represent the taxable property base for schools as certified by the Illinois Department of Revenue.

PROPERTY TAX CYCLE

The property tax cycle extends over a two year period. During the first year, the property is assessed and the assessed value reflects the property value as of January 1 of that year. During the second year, the actual tax bills are paid (e.g. 2007 taxes are paid in 2008)

Property Tax Extensions by Taxing the District

SCHOOLS 57%

COUNTIES 11%

MUNICIPALITIES 17%

OTHER 15%

AVERAGE

WHAT IS A LEVY?

Levy is the fundamental request by a school district for a certain amount of revenue to be generated by the property tax.

The formal request is sent to the county clerk. County clerk calculates the necessary rate. Each school district must issue its levy by the last

Tuesday in December. This levy determines that year’s taxes, which are payable the following year.

TAX LEVY

2007 LEVY EXTENSION2007 LEVY EXTENSION

-------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------- = = 2007 Tax Rate2007 Tax Rate

2007 Equalized Assessed Valuation2007 Equalized Assessed Valuation

Example: District #15

(2007) = 5,247,364 = .046643 or $4.664 / $100 EAV

112,500,579

TRUTH IN TAXATION ACT

Provides taxpayers with the means to check excessive school district spending.

Requires taxing districts that plan to adopt a levy exceeding the property taxes extended for the previous year by more than 5% to publish a specified notice and hold a public hearing.

The notice must be a specific size, have a black border, and appear in a newspaper of general circulation.

Property Tax Extension Limitation Law (PTELL)

PTELL is designed to limit the increase in property tax extension (total taxes billed) for non-home rule taxing districts. Increase in property tax extensions are limited to the lessor of 5% or the increase in the national Consumer Price Index (CPI) for the year preceding the levy year. The limitation can be increased for a taxing body with voter approval.

PTELL does not “cap” either individual property tax bills or property assessments. Instead, it allows a taxing district a limited inflationary increase in tax extensions on existing property, plus an additional amount of new construction.

Property Tax Extension Limitation Law (PTELL)

CPI is used for all Urban Consumers published by the United States Department of Labor. – this is the rate we receive on existing property. (www.stats.bls.gov/blshome)

Plus New property

LEVY RESTRICTIONS

3.75% limiting rate on the 2007 tax extension over 2006 amount (tax cap). (Excludes Bond & Interest Fund and new construction).

Tax rate limit on individual funds.

LEVY / EXTENSION

Levy : The amount that we ask for from the taxpayers needed to run the school district.

Extension: The amount of money we actually receive

Balloon Levy: Ask for larger percent levy to be sure to capture all available dollars for the school. Although this does not increase any tax rates, it assures us that we are not leaving money on the table for the school district.

ASSESSMENT (Apportionment of the Burden)

Assessment is the valuation of real estate for purposes of property taxation.

Illinois law requires real property to be assessed at 331/3% assessment rule. (Farmland is an exception to the 33 1/3% assessment rule. Farmland is assessed on its ability to produce income)

Who Assess Property?Who Assess Property?-Elected township assessors

ASSESSMENTWhen is Property Assessed?

All properties in Illinois must be reassessed every four years. County boards may organize assessment districts with one reassessed every year.

HOW IS HOW IS PROPERTY ASSESSED?PROPERTY ASSESSED?

Property is assessed with respect to its value and ownership on January 1 of the assessment year.

BUDGET / LEVY CYCLE

Questions please contactDave Root, Superintendent

rootd@wcusd15.orgor

566-2014