Understanding the Tax Calculation Teddy Dumlao. Key Questions What is the relationship between tax rates and tax amounts? What governing board decisions.

Understanding the Tax Calculation

Teddy Dumlao

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?

Prop 301

Bonds, Over-ridesPrimary Levy

Equal-ization Assis-tance

Education

Income & Sales Tax Sales Tax Initiative

Property Tax - Primary Property Tax - Secondary

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

1980 Tax Reforms

Equalize Tax RatesDecrease reliance on property taxesEqualize per-pupil spending

◦“… a general and uniform public school system…”

Property Values and the Levy

Qualifying Tax Rate

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!)

Total Cash Requirements

Gilbert Unified Property Taxes

$361.35 $445.75

$807.10

Gilbert Unified Property Taxes

$360.75 $373.98

$734.73

$(0.60) $(71.77)

$(72.37)

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

Equalization Base

Number of Students (Average Daily Membership)◦ Weighted to address higher needs like disabilities

Teacher Experience IndexTransportation Miles

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

$ 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

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

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

Per Pupil Funding

$ per Student

$ per Student

$ per Student

$ per Student

Chandler

Gilbert

Mesa

Higley

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

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

Per Pupil Funding

$ per Student

$ per Student

$ per Student

$ per Student

Gilbert

Governing Board Budget Adoption Voter Approval

Chandler

Mesa

Higley

County Portion of Equalization Assistance

Homeowner’s Rebate

Primary and Secondary Taxes

Your Tax Bill

Tax Comparison Worksheet

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.

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

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)

$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)

QUESTIONS?ANSWERS !