May 9, 2012 - Learn more about how the new tax levy cap legislation helped shape the proposed budget for 2012-13 by viewing the Fast Facts below. For more information about the proposed budget, tax levy cap and to view the budget newsletter, visit the Budget page.
The tax levy cap, often referred to as a “2 percent tax cap” does NOT limit a tax levy increase, tax rate increase or individual tax bills to 2 percent.
Under the law, each district must use an eight-step formula determined by the state to calculate its individual tax levy limit. The rate of inflation or 2 percent, whichever is lower, is just one part of the tax levy limit calculation. That is where the phrase “2 percent tax cap” comes from.
After a school district calculates its tax levy limit, it then adds exemptions (factors that “don’t count” against the cap, including voter-approved local capital expenditures and certain increases in state-mandated employer contribution rates and court orders/judgments) into that amount to find its maximum allowable levy.
Goshen’s maximum allowable levy – its tax levy limit with added exemptions – is $41,581,628 or a 2.21 percent increase over the current year’s tax levy.
If a district meets or stays below its tax levy limit (before exemptions), a simple majority of voters (more than 50 percent) must approve the budget for it to pass. If a district exceeds its tax levy limit (before exemptions), then a super majority of voters (60 percent) must approve the budget for it to pass.
Goshen will meet its maximum allowable levy of 2.21 percent and will need a simple majority of voters to approve the budget. Learn more about the tax levy cap
If the proposed budget is not approved, the district may submit the same budget proposal or a revised budget proposal for another vote, or go directly to contingency. If a second vote is not approved, the district must adopt a contingent budget.
Under the new law, a district that adopts a
contingent budget cannot increase its tax levy from that of the
prior year by any amount – a ZERO percent increase. A contingent
budget will result in an additional $898,287 in cuts for next year.
Learn more about contingent budgets