PROPERTY TAX FREEZE CREDIT Raymond Castellani Superintendent of Schools Patrick Witherow Director of Business & Finance May 1, 2014 1
Property Tax Freeze Credit The 2014-15 enacted State budget establishes a property tax freeze credit for NYS homeowners for the 2014-15 and 2015-16 school years. The credit will be implemented as a rebate check based on taxes imposed by school districts and other municipalities that are subject to the property tax levy cap (county, town, village, library, etc.) The rebates for STAR eligible homeowners in each entity will be based on each entity s compliance with the property tax cap; i.e., if the school district complies with the cap and the county does not, the homeowner will receive a rebate for the school taxes and not for the county taxes. Does the proposed 2014-15 Marlboro CSD budget qualify for this rebate? YES! Marlboro CSD s tax cap limit is 3.06%, the proposed budget levy increase is 2.19%, well below the statutory limit! 2
ELIGIBILITY Residential property owners that are eligible for a STAR exemption on their primary residence. Homeowners that failed to apply for STAR, but are eligible, will also receive the rebate. The school district must comply with the property tax levy limit, including exclusions (maximum allowable levy), in 2014-15 and/or 2015-16. An approved government efficiency plan is also required in 2015-16. Eligible property owners will receive the credit via REBATE CHECKS issued by NYS Tax & Finance Department in Autumn of 2014 and/or 2015. In 2014, for homeowners in a tax freeze compliant district (Marlboro), the rebate credit will be equal to: the GREATER of the 2014-15 increase in school taxes OR 1.46% X 2013-14 school tax bill In 2015, for homeowners in a tax freeze compliant district with an approved efficiency plan, the rebate will be equal to the rebate received in 2014 PLUS the GREATER of the increase in school taxes in 2015-16 or (2014-15 school taxes X the lesser of 2% or the CPI applicable to the tax levy limit in 2015). 3
ELIGIBILITY For eligible homeowners, the rebate will not include an increase in taxes due to assessment increases as a result of: Property improvements or Loss of exemption(s) Receipt of a rebate is not dependent on if, or when, a tax bill is paid. Homeowners in a school district that does not comply with the tax cap in 2014 will be eligible for the rebate in 2015 as long as the school district complies with the tax cap and has an approved efficiency plan in 2015. The 2015 rebate will be based only on the increase in their school tax bill in 2015 compared to 2014. In 2015, in addition to complying with the property tax cap, the rebate will also be dependent upon a school district having a state approved efficiency plan. The plan must demonstrate the district will achieve three years of savings and efficiencies equivalent to 1% per year of the 2014 school tax levy in each of the three years starting in 2016-17 Plans may be regional, multi-district, or individual school district BOCES may convene and facilitate development of a regional efficiency plan 4
What does this mean for Marlboro CSD? GOOD NEWS!!!! The proposed Marlboro CSD 2014-15 budget is compliant with the NYS Property Tax Cap. Homeowners will receive a check for the amount of the increase in their tax bill in Autumn 2014! In effect, you will not experience any financial increase in your taxes in the 2014-15 school year any increase in your bill will be refunded to you by NYS Department of Taxation & Finance! WHAT DOES THIS MEAN FOR THE FUTURE???? LET S TAKE A LOOK 5
Combined Dynegy & Budget Impact This is the combined effect of a passed budget and the shift in Helios and CCI TAV s 2014-2015 Original Tax Increase Projection (Year 1) $200,000 Sale Price Home Tax Cost as a result of Large Parcel TAV reductions & passed budget Basic STAR Exemption Enhanced STAR Exemption Basic STAR Enhanced STAR Marlborough & Plattekill $565 $47 Marlborough & Plattekill $437 $36 Newburgh $617 $51 Newburgh $471 $39 (Assumptions: Equalization rates remain at 13-14 values, municipal valuations remain unchanged, exclusive of recently passed enhanced Veteran s exemptions) 6
Combined Dynegy & Budget Impact 2014-2015 Updated Tax Increase Projection (Year 1) $200,000 Sale Price Home Realized Tax Increase after receipt of Rebate Check in Autumn 2014 Basic STAR Exemption Enhanced STAR Exemption Basic STAR Enhanced STAR Marlborough & Plattekill $0 $0 Marlborough & Plattekill $0 $0 Newburgh $0 $0 Newburgh $0 $0 7
Combined Dynegy & Budget Impact This is the combined effect of a passed budget and the shift in Helios and CCI TAV s 2015-2016 Original Tax Increase Projection (Year 2) $200,000 Sale Price Home Tax Cost as a result of Large Parcel TAV reductions & passed budget Basic STAR Exemption Enhanced STAR Exemption Basic STAR Enhanced STAR Marlborough & Plattekill $205 $17 Marlborough & Plattekill $159 $13 Newburgh $224 $19 Newburgh $171 $14 (Assumptions: Equalization rates remain at 13-14 values, municipal valuations remain unchanged, exclusive of recently passed enhanced Veteran s exemptions) 8
Combined Dynegy & Budget Impact 2015-2016 Updated Tax Increase Projection (Year 2) $200,000 Sale Price Home Realized Tax Increase after receipt of Rebate Check in Autumn 2015 Basic STAR Exemption Enhanced STAR Exemption Basic STAR Enhanced STAR Marlborough & Plattekill $0 $0 Marlborough & Plattekill $0 $0 Newburgh $0 $0 Newburgh $0 $0 9
Salary Increases 0.00% 0.50% 1.00% 0.50% 1.00% 2013-2014 Tax Levy Tax Cap Tax Cap Tax Cap Tax Cap Tax Cap Tax Cap $35,019,116 2.19% 1.70% 1.50% 2.00% 1.50% 1.50% 2013-2014 Budget 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 $50,421,631 PROPOSED PROJECTED PROJECTED PROJECTED PROJECTED PROJECTED BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET REVENUES 5% Aid Inc $2M Aid Inc $1M Aid Inc 1.5% Aid Inc 1.5% Aid Inc Non-Property Tax Revenue $11,438,073 $12,009,977 $13,809,034 $14,809,034 $15,031,170 $15,256,637 Misc Revenues/Federal $350,000 $350,000 $350,000 $350,000 $350,000 $350,000 Emergency Aid $4,000,000 $0 $0 $0 $0 $0 Prior Year Ajustment (PYA) $440,000 $3,500,000 $0 $0 $0 $0 Appropriated FB $0 $0 $0 $0 $0 $0 Reserves $0 $0 $1,750,000 $700,000 $500,000 $300,000 Local Tax Levy $35,786,035 $36,394,397 $36,940,313 $37,679,119 $38,244,306 $38,817,971 TOTAL REVENUES $52,014,108 $52,254,374 $52,849,347 $53,538,153 $54,125,476 $54,724,608 TOTAL EXPENDITURES $51,796,302 $52,254,374 $52,849,347 $53,538,153 $54,125,476 $54,724,608 Deficit -$217,806 $0 $0 $0 $0 $0 Levy Increase ($) $766,919 $608,363 $545,916 $738,806 $565,187 $573,665 Budget Growth (%) 2.73% 0.88% 1.14% 1.30% 1.10% 1.11% Budget Growth ($) $1,374,671 $458,072 $594,973 $688,806 $587,322 $599,132 Salary/Longevity Growth ($) $444,918 $509,337 $593,630 $465,095 $572,042 Net Available Revenue $13,154 $85,636 $95,177 $122,227 $27,090 10
How Does this Affect the Dynegy Tax Liability Shift? The property tax freeze rebate ends in the 16-17 school year. This is the same year the Danskammer plant goes back to floating in regards to TAV. Plant TAV was $49 Million prior to bankruptcy sale TAV was arbitrarily set at $15 Million by court Helios has already petitioned to restart the plant Can we assume there is potential for significant increase in TAV from major capital improvements to restart the plant? Any increase in assessment will REDUCE the original tax increase projections! 11
YEAR 2 YEAR 1 School District Property Tax Freeze Credit Basic STAR NEWBURGH Enhanced STAR MARLBOROUGH & PLATTEKILL Basic STAR Enhanced STAR Summary of 2014-2015 Expected Tax Increases and Corresponding Rebates 2014-2015 Projected Tax Increase $617 $471 $565 $437 2014-2015 Expected Tax Rebate $617 $471 $565 $437 2014-2015 Net Effective Tax Increase $0 $0 $0 $0 Summary of 2015-2016 Expected Tax Increases and Corresponding Rebates 2015-2016 Projected Tax Increase $224 $171 $205 $159 2015-2016 Expected Tax Rebate $841 $642 $770 $596 2015-2016 Net Effective Tax Increase $0 $0 $0 $0 12
QUESTIONS???? 13