understanding the tax calculation teddy dumlao. key questions what is the relationship between tax...
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Understanding the Tax Calculation
Teddy Dumlao
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Key Questions
What is the relationship between tax rates and tax amounts?
What governing board decisions and bond/override election results affect taxes and per pupil funding?
If the board adopted a budget lower than the budget limit to maintain the current primary tax rate, how would that impact my property tax bill and the school district?
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Prop 301
Bonds, Over-ridesPrimary Levy
Equal-ization Assis-tance
Education
Income & Sales Tax Sales Tax Initiative
Property Tax - Primary Property Tax - Secondary
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Property Taxes
Property Taxes
Property Taxes
$ per Student
$ per Student
$ per Student
Gilbert
Roosevelt
Scottsdale
Problems with Old Model
Disparity of tax rates to support education
Heavily reliant on property taxesDisparity of Funding
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1980 Tax Reforms
Equalize Tax RatesDecrease reliance on property taxesEqualize per-pupil spending
◦“… a general and uniform public school system…”
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Property Values and the Levy
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Qualifying Tax Rate
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Full Cash Value
Full Cash Value (FCV) is a reflection of the market value of your property and consists of land and improvements.
Tax year reflects the year the tax bill is calculated and mailed but is based on market conditions of January the previous year.
2014 Gilbert Median Value increased to $159,000 (That is good news!)
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Total Cash Requirements
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Gilbert Unified Property Taxes
$361.35 $445.75
$807.10
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Gilbert Unified Property Taxes
$360.75 $373.98
$734.73
$(0.60) $(71.77)
$(72.37)
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Primary Tax Rate and Amount
Gilbert Median Home
$143,300 4.0884 $361.35Year Median Value Rate Amount
2012 $143,300 4.0884 $361.35
2013 $136,100 4.3518 $360.75
2014 $159,000 3.8692 $360.75
$136,100 4.3518 $360.75
20122013
$159,000 3.8692 $360.75
2014
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Equalization Base
Number of Students (Average Daily Membership)◦ Weighted to address higher needs like disabilities
Teacher Experience IndexTransportation Miles
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Equalization Assistance
Equalization Base◦Equitable funding
Qualifying Levy◦Portion of the equalization that comes from
Local Property taxes as opposed to state funds.◦The local effort expected to provide equitable
student funding for your districtEqualization Assistance
◦The state revenue calculation to provide equitable student funding for your district
Equalization BaseEqualization AssistanceQualifying Levy
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$ per Student
$ per Student
$ per Student
Qualifying Levy
Qualifying Levy
Qualifying Levy
Equalization Assistance
Equalization Assistance
Property Taxes
Property Taxes
Property TaxesMin QTR
Roosevelt
Gilbert
Scottsdale
Qualifying Levy
Cave Creek
Equalization Base
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Budget Limit vs. Adopted Limit
$ per Student
Gilbert
Qualifying LevyEqualization Assistance
Property Taxes
Budget Limit
Rate: 4.3518 Amount: $360.75
Total Savings: 5 cents / month
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Budget Limit vs. Adopted Limit
$ per Student
Gilbert
Qualifying LevyEqualization Assistance
Property Taxes
Adopted LimitAdditional Cuts
Rate: 4.0884 Amount: $324.90
Total Savings: $3.04/ month
$5.5M
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Per Pupil Funding
$ per Student
$ per Student
$ per Student
$ per Student
Chandler
Gilbert
Mesa
Higley
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Equalization AssistanceProperty Taxes
Gilbert
M&O Override
Cap
ital
Overr
ides
Bonds
SecondaryPrimary
$ per Student
$(0.60) $(71.77)
M&O Override
Cap
ital
Overr
ides
Secondary Taxes
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Equalization AssistanceProperty Taxes
Gilbert
M&O Override
Cap
ital
Overr
ides
Bonds
SecondaryPrimary
$ per Student
$(0.60) $(71.77)
Reducing the limit to keep the rate the same will lower the bill
by an additional $36 for the year or $3/month
M&O Override
Cap
ital
Overr
ides
$5.5
M
$(36.45)
Primary Tax Amount vs Tax Rate
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Per Pupil Funding
$ per Student
$ per Student
$ per Student
$ per Student
Gilbert
Governing Board Budget Adoption Voter Approval
Chandler
Mesa
Higley
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County Portion of Equalization Assistance
Homeowner’s Rebate
Primary and Secondary Taxes
Your Tax Bill
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Tax Comparison Worksheet
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Key Points
Since the Qualifying Tax Rate fluctuates in response to changes in property value, a Primary Tax Rate increase does NOT necessarily mean a Primary Tax Amount increase to support basic M&O K-12 funding.
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Key Points
The governing board may adopt the formula based budget limit or a lesser amount to reduce the primary taxes and per pupil funding.
Bond and Override election results determine the amount of additional funding beyond the formula that may be levied to increase per pupil funding for the district.
Gilbert $ per Student
Chandler $ per Student
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Key Points
The expiration of a capital override and the phasing out of the M&O override will result in an annual property tax bill reduction of $72 for a median home in Gilbert for the 2013 tax year.
$(72)
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$5.5M
Key Points
Adopting a budget below the formula limit for the sake of maintaining the current primary tax rate will further reduce the property bill by…◦an additional $36 for the year or◦an additional $3 per month ◦and will reduce the district revenue by $5.5M
$(72)
$3 a month = $5.5M
Gilbert $ per Student$(36)
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QUESTIONS?ANSWERS !