Changes for contingency budgets under tax levy
What happens if the budget is not approved by voters?
April 26, 2012 -
This year, there are changes concerning contingency budgets under
the state’s property tax levy cap legislation.
Past contingency budget guidelines
In previous years, school boards could submit a budget to voters a
maximum of two times. If the proposed budget was defeated, the Board of
Education had three options: present the same budget for a vote; submit
a revised budget for a vote; or adopt a contingency budget. If the
budget was defeated twice, the board had to adopt a contingency budget,
The contingency budget placed a cap on new spending –
the district couldn’t increase spending by more than 120 percent of the
average change in Consumer Price Index (CPI) or four percent, whichever
was lower. Last year, for instance, the
contingency budget cap was 1.92 percent.
Changes in contingency
for the 2012-13 budget
There are changes for this year’s budget,
under the tax levy cap law. If a district’s budget is not approved by
voters, it still has the same options as in previous years: to adopt a
contingency budget or go for another vote with the same or a revised
budget. If the budget is not approved a second time, the district MUST
adopt a contingency budget.
However, under the new law, a district that adopts a
contingency budget cannot increase its tax levy from that of the prior
year by any amount – a ZERO percent increase.
For Goshen, a contingent budget would
result in approximately $898,287 in
additional cuts from the proposed
budget, which by law would include
approximately $171,050 in equipment.
In addition, the district would be subject
to various limits and controls on how the
money within the contingent budget is
spent, and the district would have to charge
fees for public use of school buildings and
“Obtaining our community’s support for our budget
proposal is more critical than ever, given the law’s new contingent
budget restrictions,” said Superintendent Daniel Connor. “If a district
fails to gain voter approval and must adopt a contingent budget, then
the levy increase is truly capped, since under a contingent budget,
there can be NO increase in the tax levy.”