 Why
the 'tax levy limit' isn’t the final levy limit
Note: This story reflects information as of
the published date. It will be updated should any new
information/clarifications be made available at the state level.
The “cap” or threshold that determines whether a district needs
a simple (50 percent plus 1) or super (60 percent) majority to
pass a school budget is based on the tax levy limit.
However, it is possible for a district to propose a school
budget that carries a tax levy that is above the limit and still
only need a simple majority for it to pass.
This is because the new law allows certain
exemptions to be excluded from the tax levy limit.
Those exceptions currently include capital local expenditures,
certain court orders/judgments, and certain portions of employee
retirement costs. Capital tax levy is the tax
levy necessary to support capital local expenditures.
Capital local expenditures are the local
taxpayer-supported portion of the capital tax levy. It is
budget expenditures resulting from the construction,
acquisition, reconstruction, rehabilitation or improvement
of a district capital facilities or equipment, including
debt service and lease expenditures and transportation
capital debt service that are funded by the taxpayers.
The Court orders/judgment exemptions are
the tax levy necessary for expenditures resulting from court
orders or judgments arising out of tort actions for any
amount that exceeds 5 percent of the total taxes levied in
the current school year. This excludes tax certioraris.
Pension contribution cost increases that
exceed two percentage points are also exempt. For example,
if employer pension contribution costs increase from 14.6
percent of payroll to 16.8 percent — a 2.2 percent different
— only the funding for 0.2 percent of the increase is
exempt.
Once those exceptions are added to the tax
levy limit, the result is the maximum allowable levy a
district can propose for which only the approval of a simple
majority of voters (more than 50 percent) is required.
Any proposed tax levy amount above this limit will require
budget approval by a supermajority (60 percent or more) of
voters. As always, parents, staff, students and
taxpayers are urged to voice their opinions on these matters to
our elected leaders.
Next:
Mandate relief measures and the 'tax cap'
The tax “cap” legislation was approved with a package of changes
intended to control school districts and local governments
spending. These included the creation of a Mandate Relief
Council to curb some of the laws and regulations that lead to
escalating expenses for school districts and local government.
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