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Guaranteed Tax Base Aid
The Great Equalizer
Janelle Mickelson, Administrator OPI School Finance Division MASBO Summer Conference June 19, 2014
Guaranteed Tax Base Aid
The Great Equalizer
Late 1980’s – Legal cases against the state of MTIssues:• Spending Equity/Tax Equity• Sufficiency/Adequacy
Courts upheld :• Unequal per pupil spending• Unequal educational
opportunities
Guaranteed Tax Base Aid
The Great Equalizer
In the 1989 Special Session the State created Guaranteed Tax Base Aid (GTBA) payments to address the disparity in wealth.
Three types of GTBA:1. General Fund GTBA2. Debt Service GTBA (AKA: Facilities
Reimbursements)3. County Retirement GTBA
Guaranteed Tax Base Aid
20-9-367. Eligibility to receive guaranteed tax base aid or state advance or reimbursement for school facilities. (1) If the district guaranteed tax base ratio of any elementary or high school district is less than the corresponding statewide elementary or high school guaranteed tax base ratio, the district may receive guaranteed tax base aid based on the number of mills levied in the district in support of up to 35.3% of the basic entitlement, up to 35.3% of the total per-ANB entitlement, and up to 40% of the special education allowable cost payment budgeted within the general fund budget.
The Great Equalizer
General Fund GTBA
Debt Service GTBA
County Retirement GTBA
(3) For the purposes of 20-9-370 and 20-9-371, if the district mill value per elementary ANB or the district mill value per high school ANB is less than the corresponding statewide mill value per elementary ANB or statewide mill value per high school ANB, the district may receive a state advance or reimbursement for school facilities in support of the debt service fund.
(2) If the county retirement mill value per elementary ANB or the county retirement mill value per high school ANB is less than the corresponding statewide mill value per elementary ANB or high school ANB, the county may receive guaranteed tax base aid based on the number of mills levied in the county in support of the retirement fund budgets of the respective elementary or high school districts in the county.
Guaranteed Tax Base Aid
Components needed to determine eligibility
Taxable Values – Obtained from Department of Revenue in December (2013 Tax Year values used to calculate 2015 GTBA).
Budgeted ANB
Prior Year Basic Entitlements (needed for General Fund GTBA only)
Prior Year Per-ANB Entitlements (needed for General Fund GTBA only)
Prior Year SPED Allowable Cost Payment (needed for General Fund GTBA only)
Note: -Taxable values exclude Tax Increment Financing Districts (TIFDs)-ANB and entitlements are not adjusted for unanticipated enrollment increases or audit adjustments.-ANB and entitlements are adjusted for anticipated enrollment increases that did not materialize.-SPED Allowable Cost Payment includes related service block payments to Coops and disproportionate cost reimbursements.
Guaranteed Tax Base Aid
Timeline For Calculating GTBA Eligibility For The Ensuing Fiscal Year
• Budgeted ANB is taken from the current fiscal year adopted budget received in September. (Budget ANB in FY2014 is used to determine eligibility for FY2015).
• OPI receives a final determination of taxable values from DOR by December 1. (2013 taxable values are used to determine eligibility for FY2015).
• OPI performs reasonability checks on changes in taxable values and verifies total elementary taxable values equal total high school taxable values. (generally takes a couple of weeks with an exchange of correspondence between DOR and OPI)
• OPI calculates, tests, and verifies GTBA ratios, facility guaranteed mill values per ANB and district mill values per ANB (completed prior to February 1)
• OPI adjusts budgeted ANB and budget limits for districts whose anticipated enrollment increase did not materialize and recalculates, tests, and verifies GTBA ratios , facility guaranteed mill values per ANB and district mill values per ANB (completed after the 1st Monday in February)
• OPI provides GTBA ratios and mill value per ANB ratios to districts and counties by March 1st. (information is provided on Preliminary Data Sheets)
Guaranteed Tax Base Aid
General FundStatewide Guaranteed Tax Base Ratio
Calculated separately for elementary and high school:
193%Statewide Taxable Value
Statewide GTB Ratio
35.3% of Basic Entitlement + 35.3% of Per-ANB Entitlement + 40% of SPED Allowable Cost Payment
Statewide
Guaranteed Tax Base Aid
General Fund
Example:
Statewide taxable valuation (Tax Year 2013)
Statewide Guaranteed Tax Base Ratio
Elementary High School
2,474,575.849.00 2,474,575.849.00
X 193% 4,775,931,388.57 4,775,931,388.57
35.3% of Basic Entitlement + 35.3% of Per-ANB Entitlement + 40% of Special Education Allowable Cost Payment (all districts for FY 2014)
219,797,789.99 120,362,485.36
FY 2015 Elementary GTB Ratio(4,775,931,388.57/219,797,789.99)
21.73
FY 2015 High School GTB Ratio(4,775,931,388.57/120,362,485.36) 39.68
Guaranteed Tax Base Aid
General FundDistrict GTBA Subsidy per Base mill
35.3% of District’s Basic Entitlement
35.3% of District’s Per ANB Entitlement
40% of District’s SPED Allowable Cost Payment
Statewide GTB Ratio
District’s Guranteed Tax Base
District’s Guranteed Tax Base
District’s Taxable Value .001
District’s GTB Subsidy per Base Mill
Guaranteed Tax Base Aid
General FundDistrict GTBA Subsidy per Base mill
Example:
35.3% x 120,000 = 42,360.00 35.3% x 835,444 = 294,911.7340% x 33,438.76 = 13,375.50Total 350,647.24 X 21.73 Guaranteed Tax Base $7,619,564.44 - 4,498,996.00 $3,120,568.44
District’s FY15 GTBASubsidy Per Base Mill $3,121.00
X .001
For every base mill levied, the state will pay $3,121 local taxpayers will pay $4,499
Assume:FY 14 Basic Entitlement = $120,000.00FY 14 Per-ANB Entitlement = $835,444.00FY 14 SPED Allowable Cost Payment = $33,438.76FY15 Statewide GTBA Ratio = 21.73Tax Year 2013 District Taxable Valuation = 4,498,996
Guaranteed Tax Base AidGeneral Fund BASE
Budget
Quality Educator Payment
At-Risk Payment
Indian Education For All Payment
Student Achievement Gap Payment
Data For Achievement Payment
100% of 5 Funding Components
40% of SPED Allowable Cost Payment
Direct State Aid(44.7% of Basic Entitlement and 44.7%
of Per-ANB Entitlement)
NRD PaymentFund Balance Reappropriated
Non-Levy Revenues
GTB Property Tax Levy
GTB Budget Area
BASE BudgetOverBASE Budget
Guaranteed Tax Base Aid
Debt Service GTBA
AKA: Facility Reimbursement
140%Statewide Taxable Value
Facility Guaranteed Mill Value Per ANB
1000Statewide
ANB
If:
District Mill Value Per ANB
Is less than:
District’s Taxable Value
1000
Then:
District is Eligible for GTBA
District ANB
Calculated separately for elementary and high school:
Guaranteed Tax Base Aid
Debt Service GTBA
AKA: Facility ReimbursementOnly General Obligation Bonds qualify for
Facility Reimbursement (Debt Service GTBA)MCA, 20-9-408, "General obligation bonds" means bonds that pledge the full faith and credit and the taxing power of a school district.
Guaranteed Tax Base Aid
Debt Service GTBA
AKA: Facility ReimbursementCalculation of School Facility Reimbursement
$300 per ANB for elementary$370 per ANB for approved and accredited junior high or middle school$450 per ANB for high school
School Facility Entitlements:
(1-(district mill value per ANB/Facility guaranteed mill value per ANB)
State share of entitlement times the lesser of the total facility entitlement or the district current year debt service obligation
State share of entitlement:
School Facility Reimbursement :
Guaranteed Tax Base AidDebt Service
GTBACalculation of School Facility ReimbursementExample
Assume:Facility Guarantee Mill Value Per ANB = 30.39District Mill Value Per ANB = 20.39Elementary ANB = 182; Middle School ANB = 67District Debt Service Obligation = $118,068
District is eligible for debt service GTB. District Mill Value Per ANB is less than the Facility Guarantee Mill Value Per ANB
Facility Entitlement = $79, 390 [(182 x $300) +(67 x $370)]
State Share of Entitlement .329056 [1-(20.39/30.39)]
School Facility Reimbursement = $26,123.72 [.329056 x $79,390]
Guaranteed Tax Base AidDebt Service
GTBACalculation of School Facility ReimbursementIn the first year of an eligible bond, an eligible district will receive both an advance and a reimbursement. No GTBA is paid on the bond in the final year.
Districts only budget for the advance in the first year, not the reimbursements.
1st Year
Advance Advance
PropertyTaxes
Property Taxes
Facility Reimb
Budget Actual
(Debt Payment)
(Debt Payment)
Fund Balance = 0
Fund Balance =
Facility Reimb
Subsequent Years Final YearBudget ActualProperty
TaxesProperty Taxes
Fund Balance Reapprop
Fund Balance Reapprop
Facility Reimb
Property Taxes
Property Taxes
Fund Balance
Reapprop
Fund Balance
Reapprop
ActualBudget
(Debt Payment)
(Debt Payment)
Fund Balance = 0
Fund Balance = Facility
Reimb
(Debt Payment)
(Debt Payment)
Fund Balance = 0
Fund Balance = 0
Guaranteed Tax Base Aid
The amount available for facility reimbursements/advances is subject to appropriation by the State Legislature each biennium.
Within the available appropriation, the OPI first distributes the state advances. From the remaining appropriation, the OPI distributes state reimbursement for school facilities.
If the legislative appropriation for the state reimbursement for school facilities is less than the school facility entitlement amount for which districts qualify, the OPI will prorate the state reimbursement based on total amount for which districts qualify.
Whenever the state reimbursement is prorated, the prorate percentage is applied to the state advance in the ensuing year.
Debt Service GTBA
Guaranteed Tax Base AidDebt Service
GTBA
Preliminary
Guaranteed Tax Base AidCounty Retirement
GTBA
121%Statewide Taxable Value
Statewide Mill Value Per ANB
1000Statewide
ANB
If:
County Retirement Mill Value Per ANB
Is less than:
County’s Taxable Value
1000
Then:
County is Eligible for GTBA
County ANB
Calculated separately for elementary and high school:
Guaranteed Tax Base AidCounty Retirement
GTBACalculated separately for elementary and high school:
Calculation
County Retirement Fund Mills
County Retirement GTBA
County Retirement Subsidy Per Mill
County Retirement Subsidy Per Mill
Statewide Mill Value Per ANB
County Retirement Mill Value Per ANB
State Retirement Mill Value Per ANB
State Retirement Mill Value Per ANB
County ANB
Guaranteed Tax Base AidCounty Retirement GTBAExample
Assume: Elem HSNet County Requirement: $288,957.27 $223,600.81State GTBA Mill Value/ANB 28.12 65.01County Mill Value/ANB 22.04 50.81County ANB 499 214 County Mill Value = 10,731.634
State Retirement Mill Value Per ANB
Elementary High School
6.08(28.12-22.04)
14.20(65.01-50.81)
County Retirement Subsidy Per Mill
$3,033.92(6.08 x 499)
$3,038.80(14.20 x 214)
County Adjusted Mill Value
13,765.554(10,731.634 + 3,033.92)
13,770.434(10,731.634 + 3,038.80)
Retirement Fund Mills
20.99(288,957.27/13,765.554)
16.24(223,600.81/13,770.434)
County Retirement GTBA
$63,681.98(20.99 x 13,765.554)
$49,350.11(16.24 x 13,770.434)
END