2017 TAX LEVY INFORMATION BOARD OF EDUCATION MEETING OCTOBER 19, 2017
Local Property Taxes are the Primary Source of Revenue for D211 TAX REVENUE SUPPORTS INSTRUCTIONAL AND OPERATIONAL NEEDS OF THE DISTRICT INTEREST ON 2017-2018 INVESTMENTS, 0.3% REVENUE BY CATEGORY GENERAL STATE AID, 2.7% LOCAL PROPERTY TAXES, 85.3% CATEGORICAL STATE AID, 3.9% FOOD SERVICE SALES, 1.3% CORPORATE P.P.R. TAX, 1.2% FEES & OTHER, 2.1% FEDERAL AID, 2.8% TUITION, 0.4%
Understanding the “Tax Cap” District 211 is subject to the Property Tax Extension Limitation Law CPI‐U is a factor in determining the limit by which ( PTELL) also known as the “Tax Cap” a Tax Capped district may increase their levy Impacts all school districts in Cook County and numerous other counties throughout the state CPI‐U History 2009 0.1% The Tax Cap limits the aggregate levy amount to: 2010 2.7% A) increase in the prior year’s CPI % plus 2011 1.5% B) addition of new property growth 2012 3.0% Prohibits districts from fully recovering operating revenue if amounts 2013 1.7% are levied less than the tax cap amount 2014 1.5% Each year’s levy sets the foundation amount by which taxes may be 2015 0.8% levied for the following year 2016 0.7% Does not “cap” individual property tax bills 2017 2.1%
2017 Levy Considerations Aggregate levy limit: 2.4% 2016 CPI‐U amount to determine tax cap limit for the 2017 levy = 2.1% New property growth estimated at 0.3% Because we will be debt free, we will no longer have a debt service levy 2017 levy impacts the 2018‐2019 fiscal year budget Levy must provide revenue sufficient to support annual instructional programming, operating needs, life safety and facility improvement projects Property Tax refunds at unprecedented amounts last fiscal year and trend continues
2017 Levy Recommendation Levy in accordance with tax cap restrictions (CPI+ New Property = 2.4%) 2016 2017 Actual Levy Recommended % Change Allocate additional funds for bus Educational 171,838,446 173,000,000 0.7% replacement needs Operations/Maintenance 28,552,574 28,875,000 1.1% Transportation 7,481,124 8,500,000 13.6% Allocate levy funds to pay for life IL. Municipal Retirement 4,835,822 4,950,000 2.4% safety projects Social Security 4,835,822 4,950,000 2.4% Working Cash 0 2,500,000 100.0% Allocate funds in Educational fund TOTAL 217,543,788 222,775,000 2.4% to support current programming Levy to support IMRF and Social Security employer costs
School Bus Replacement Needs Approximately 160 buses Targeted Life: 10‐12 Years Accelerate purchases of buses to lower the current life
Life Safety/ Facility Improvement Projects 2018‐2019 Project Planning Life Safety Mechanical Equipment Replacement Restroom Renovations Stadium Carpet/Track Replacement Outdoor Field Renovations
Impact of the Recommended Levy on the Median Home Value Taxpayer These figures do NOT • Median Home Value: $252,300 Hoffman Estates include the additional • Impact of D211 Recommended Levy: $48 homeowner exemptions recently approved for Cook County. • Median Home Value: $266,700 Palatine • Impact of D211 Recommended Levy: $51 Additional $3,000/$6,000 exemptions would • Median Home Value: $233,400 further reduce these Schaumburg amounts • Impact of D211 Recommended Levy: $43
Tax Levy Increase vs. Tax Refund Losses Levy Year Levy Increase Total Year‐Over‐ Property Tax Year Refund Losses 2016 1,069,333 9,147,181 2015 428,231 5,426,922 2014 3,628,525 5,071,657 For each of the last 3 years, the District has lost more in property tax refunds than it has increased in its levy
5‐Year Fund Balance Projection Five-Year Financial Projection (Operating Funds) Cash Basis ‐ rounded $000's 2017‐2018 2018‐2019 2019‐2020 2020‐2021 2021‐2022 % +(‐) % +(‐) % +(‐) % +(‐) % +(‐) Budgeted Projected Projected Projected Projected BEGINNING FUND BALANCE $ 131,087,000 $ 110,608,000 $ 107,593,000 $ 105,340,000 $ 102,914,000 TOTAL DIRECT REVENUE 249,320,000 1.7% 256,376,000 2.8% 261,043,000 1.8% 264,826,000 1.4% 269,111,000 1.6% TOTAL DIRECT EXPENDITURES 241,162,000 2.7% 246,961,000 2.4% 251,296,000 1.8% 255,252,000 1.6% 259,799,000 1.8% BUDGET SURPLUS/ (DEFICIT) 8,158,000 9,415,000 9,747,000 9,574,000 9,313,000 SPECIAL PAYMENT TO IMRF (2,000,000) (2,000,000) (2,000,000) (2,000,000) (2,000,000) TRANSFERS OUT (NET) (26,637,000) (10,431,000) (10,000,000) (10,000,000) (10,000,000) FUND BALANCE $ 110,608,000 $ 107,593,000 $ 105,340,000 $ 102,914,000 $ 100,226,000 Operating Fund Balance % 45% 43% 41% 40% 38% of Next Yr. Expenditures Educational Fund Balance % 40% 39% 38% 36% 34% of Next Yr. Expenditures
Impact of a Reduced Levy‐ What If… • The District reduced its 2017 levy by ½ of the recommended increase? • The District abated its aggregate operating levy instead of its debt service levy over the past 2 years? What If? What If? Abated Operating Proposed Levy Reduced by 50% Funds Instead of Levy 1.2% vs. Recommended Debt Service in 2.4% Increase 2.4% Increase 2015 & 2016 Levies Decrease in Operating Fund Balance $ FY22 - ($12.5 Million) Loss ($27 Million) Loss Operating Fund Balance % FY22 38% 33% 28% Educational Fund Balance % FY22 34% 32% 29% Impact demonstrated over a 5‐year period and would continue to compound into future years
Average Levy Change Over Three Years… Over the last 3 years, the average levy change is for District 211 is 1%. Actual Levy Dollars % increase 2014 Levy $ 216,100,000 The Board of Education has accomplished reduction 2015 Levy $ 216,500,000 0.2% (abatement) of the total levy amount by more than 2016 Levy $ 217,500,000 0.5% $33 million over the past 10 years 2017 Levy $ 222,775,000 2.4% Average increase over 3 years: 1.0%
How Does the Levy Impact Individual Property Tax Bill Calculations? Factors Used to Calculate Property Description: Controlled By: Tax Bill: Property Value Value of property compared to properties of Cook County Assessor similar size and location Property Assessment Level (by Factor applied to property value to calculate Cook County Assessor Property Type) assessed value Equalization Factor Factor applied to bring Cook County properties in IL Dept. of Revenue line with all of Illinois Tax Rate Sum of all tax rates‐determined by levy amounts Local taxing body (including D211) Exemptions Lessen the amount owed and apply to individuals Cook County Treasurer meeting certain criteria Local taxing bodies control only 1 of 5 components used to determine individual property tax bill amounts
Residential Property Tax Bill Change in 2016 A sample of 50 residential property owners individual tax bills demonstrates the fluctuation and unpredictability of change for a taxpayer year‐over‐year D211 Levy Increased by 0.5% during same time period
Why Did Property Tax Bills Vary? Factors Used to Calculate Property Description: Controlled By: Tax Bill: Property Value Value of property compared to properties of Cook County Assessor similar size and location Property Assessment Level (by Factor applied to property value to calculate Cook County Assessor Property Type) assessed value Equalization Factor Factor applied to bring Cook County properties in IL Dept. of Revenue line with all of Illinois Tax Rate Sum of all tax rates‐determined by levy amounts Local taxing body (including D211) Exemptions Lessen the amount owed and apply to individuals Cook County Treasurer meeting certain criteria The State equalization factor increased in 2016 and property values were reassessed in 2016 (Total EAV increased by 13%)— These factors impact the calculation of each individual tax bill
Current and Future Reserve Allocations • At 6/30/17, the Operating Fund balance of the District was 54%. • $19.2 million is unassigned and available for strategic initiatives and contingencies. • Capital Projects • IMRF Special Payment • iPad lease • This fund balance will be used or retained over the next year as shown in the aside chart.
Tax Levy Calendar October 11, 2017 Budget and Finance Committee Meeting‐ Review levy material October 19, 2017 Board of Education Meeting‐ Levy Presentation November 1, 2017 Tentative Budget and Finance Committee Meeting if needed‐ Review levy material November 9, 2017 Board of Education Meeting‐ Determine amount of proposed 2017 levy (not less than 20 days prior to levy adoption) November 30, 2017‐December Public hearing notice must be published (no more than 14 nor 7, 2017 less than 7 days prior to public hearing) December 14, 2017 Board of Education Meeting‐ Public hearing of 2017 levy and adoption of 2017 levy December 26, 2017 Last day to file 2017 levy
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