MASA Great Start Workshop - mnasa.org in Taxation 2019...MASA Great Start Workshop. Essentials of...

MASA Great Start Workshop

Essentials of the Property Tax Levy Process & the Truth in

Taxation Hearting

Jeffrey M. Solomon, DirectorBaker Tilly Virchow Krause, LLP

Agenda

• Basis for the Property Tax Levy• Summer Data Submissions

• Proposed Levy• Truth in Taxation Requirements

• Final Levy Certification• Suggestions

• Help is Available

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The District’s Property Tax Levy Represents the Local Share of Education Costs

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Local Share of Formulas

School Board Initiatives / Decisions

Voter Approved Levies (Operating and Bond Referendums)

Minnesota School

Revenue2016-2017

Source: Minnesota Department of Education 5

Districts are Dependent on

State

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• School Levies are Limited by State Law• Education is a State Responsibility• State is Concerned with Equity

(Common and Uniform System)

• Summer Data Submissions• Proposed Levy• Truth in Taxation Notice• School Board Discussion /

Public Input• Final Certification to County• Final Certification to MDE

Levy Calendar

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March 15 – Aug. 27Sept. 30*Nov. 10 – 24 Nov. 25 – Final CertificationDec. 30 Jan. 7, 2020

See Detailed Calendar on MDE Website and Verify Dates: Levy Limitation and Certification Calendar

Summer Data Submissions

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• Long-Term Facilities Maintenance• Health and Safety• ADM and LEP Projections• Health Benefits• Other Post Employment Benefits• Non-public Transportation• Elementary and Secondary Sparsity• Building/Land Lease• Bond / Interest Payments• General and Community Service Programs

Summer Data Submissions

cont.

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• Referendum/Local Optional Revenue• Alternative Teacher Compensation (Q Comp)• Career and Technical• Disabled Access• Swimming Pool• Ice Arena• Re-employment• Capital Projects Referendum• Debt Service Excess• Etc.

Follow Instructions Provided by MDE

Proposed Levy

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• Due: Sept. 30

• Requires School Board Approval

• Based on Data Submissions and MDE Data

• Levy at “Maximum”

• Initiates Truth in Taxation Process

Levy Limitation

Form

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• Data

• Funding Formulas and Levy Authority

• Prior Years Adjustments

• Final Authority

• 40+ Pages of Numeric and Formulaic Bliss

Definitions

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• Market Value• NTC – Net Tax Capacity• ANTC – Adjusted Net Tax Capacity. • Ag Modified ANTC for LTFM• Referendum Market Value• Sales Ratio• ADM – Average Daily Membership• APU – Adjusted Pupil Units

• Parcel Specific Notices– Prepared and Mailed by

County– Proposed Tax Compared

with Prior Year– Contact Information of

Taxing Entity– TNT Meeting Date and

Location

Truth in Taxation

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• Public Meeting– Current Budget– Proposed Taxes – Tax Impact (Optional)– Public Comment

Budget

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General Fund82.77%

Debt Fund6.44%

Capital Expenditures

3.88%

Community Ed. Fund3.18%

Capital Facilities Improvement

0.00%

Food Service Fund3.74%

Revenue by Fund

Budget

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General Fund79.20%

Debt Fund7.01%

Capital Expenditures

4.65%

Community Ed. Fund2.80%

Capital Facilities Improvement

2.81%

Food Service Fund3.52%

Expenses by Fund

Tax Impact –Property

Types

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• Residential– Homestead– Non-homestead

• Apartments• Commercial/Industrial• Seasonal Recreational• Agricultural• Other

Tax Impact – Levy Comparison

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Proposed 2019 Pay 2020

Payable2018 Pay 2019

$ Change

% Change

General 2,550,598.42 2,632,842.11 -82,243.69 -3.22%Community Service

370,456.17 348,830.26 21,622.91 5.84%

Debt Service 5,104,948.61 4,795,300.38 309,648.23 6.07%Total Levy 8,026,000.20 7,776,972.75 249,027.45 3.10%

Tax Impact - Example

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202333

463593

1233

256422

587752

1562

0

200

400

600

800

1000

1200

1400

1600

1800

100,000 150,000 200,000 250,000 500,000

Market Value of Homestead Residential Property

Property Tax Comparisons – Pay 2019 Versus Pay 2020

2019 2020

Final Certification

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Adopted by School Board

Submit to Home County Auditor by Dec. 30

Submit to MDE by Jan. 7

Suggestions

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• Use the MDE Website, Program Finance, Levy Certification

• Verify all Data Whether Submitted or State Generated

• Emphasize Accurate, Realistic Projections and Estimates

• Review Adjustments from Prior Years• Compare Levy Limitation with Prior Year/s

(Historical Data)• Follow the Calendar Provided by MDE

Suggestions cont.

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• Understand the “Cost” of an Underlevy• Approve Proposed Levy at “Maximum”• Be Prepared for TNT Meeting• Use TNT Presentation as an Opportunity to Share

Financial Information• Certify Final Levy at Exact Dollar Amounts• All Data Submitted Electronically

Help is Available

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• Attend Levy Workshop (I hope you did)• MDE• Your Predecessor and/or Business Manager• School District Auditors• Financial Advisor• Neighboring School Administrators• Professional Organizations

Questions

Jeffrey M. Solomon, Director651-223-3083Jeff.Solomon@bakertilly.com

Kelly D. Smith, Director651-223-3099Kelly.Smith@bakertilly.com

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The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought.

Baker Tilly Virchow Krause, LLP trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2019 Baker Tilly Virchow Krause, LLP.

DISCLAIMERATTENTION

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