Definition of Budget Terms |
General
• Budget: A plan of financial
operation outlining the estimates of proposed expenditures for a
fiscal year and the proposed means of financing them.
• Budget Cap: State law prohibits school districts from
increasing spending annually by more than four percent. Some
areas, such as paying for debt, are excluded from that cap.
• Budget Calendar: The schedule of key dates that the
school district, Board of Education, and administrators follow
in preparation, adoption, and administration of the budget.
• Fiscal Year: A fiscal year is the accounting period on
which a budget is based. The New York State fiscal year runs
from April 1 to March 31. School districts in the State operate
on July 1 through June 30 fiscal years.
• Contingent Budget: Under state law, school boards can
submit a budget to voters a maximum of two times. If the
proposed budget is defeated twice, the board must adopt a
contingent budget, which would put a cap on new spending. Under
a contingent budget, the district may not increase spending by
more than 120 percent of the Consumer Price Index or four
percent, whichever is lower. The items exempt from this cap are
tax certiorari settlements, debt service and costs associated
with enrollment growth.
• Consumer Price Index (CPI): An index of prices used to
measure the change in the cost of basic goods and services in
comparison with a fixed base period. Also called
"cost-of-living" index.
Budget Categories
• Revenue: Sources of income financing
the operation of the school district such as property taxes, state
aid, federal aid, grants, etc.
• Expenditure: Payment of cash or transfer of property or
services for the purpose of acquiring an asset or service.
• Bond: A written promise to pay a specified sum of money,
called the face value or principal amount, at a specified date in
the future (the maturity date), together with periodic interest at a
specified rate.
• Capital Outlay: An expenditure that is generally more than
$20,000 and results in the ownership, control or possession of
assets intended for continued use over long periods of time.
Examples: the construction or acquisition of buildings and
equipment, initial equipment of buildings or additions or the
initial acquisition of library books and research periodicals for a
new school building.
• Salaries: The total amount paid to an individual, before
deductions, for services rendered while on the payroll of the
district.
• Employee Benefits: Amounts paid by the district on behalf
of employees that are not included in the gross salary. These
include the district cost for health insurance premiums, dental
insurance, life and disability insurance, Medicare, retirement,
social security and tuition reimbursement.
• Support Services: The personnel, activities, and programs
that enhance instruction and provide for the general operation of
the school district. This includes attendance, guidance, and health
programs; library personnel and services; special education services
provided by speech and language pathologists, physical therapists
and occupation therapists; professional development programs,
transportation, administration, buildings and ground operations, and
security.
• Supplies: Consumable materials used in the operation of the
school district including food, textbooks, paper, pencils, office
supplies, custodial supplies, material used in maintenance
activities and computer software.
Fund Balance
• A fund balance is created when the school
district has money left over at the end of its fiscal year from
either under spending the budget or taking in additional revenue.
• Unappropriated Fund Balance: A school district is permitted
to keep up to four percent of its fund balance in an unappropriated
fund. This money may be used to pay for emergency repairs and other
unforeseen occurrences.
• Appropriated Fund Balance: Any portion of a district's fund
balance from the previous fiscal year that is applied as revenue to
the district's following year's budget. This reduces the amount of
money that must be generated by taxes.
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State Budget Categories
• Proposed Budget: Also called
Administrative Proposal. Spending plan developed by school
administrators prior to board adoption. School districts are
required by New York State to show their proposed budgets in three
categories: administrative, program, and capital.
• Administrative Budget Component: These expenditures include
office and administrative costs; salaries and benefits for certified
school administrators who spend 50 percent or more of their time
performing supervisory duties; data processing; supplies; legal
fees; property insurance; and school board expenses.
• Capital Budget Component: This covers all transportation
capital, debt service, and lease expenditures; legal judgments and
settled claims; custodial costs and all facility costs, including
service contracts, supplies, utilities, maintenance, repairs,
construction, renovation, debt and leasing costs.
• Program Budget Component: This portion includes salaries
and benefits of teachers and supervisors who spend the majority of
their time teaching; instructional costs such as supplies,
equipment, and textbooks; and transportation operating costs.
Tax Terms
• Tax Rate: The amount of tax paid for
each $1,000 of assessed value of property.
• Tax Levy: The total sum to be raised by a tax, or the
legislative measure by which an annual or general tax is imposed.
• Tax Certiorari: The legal process (lawsuit) by which a
property owner can challenge the real estate tax assessment on a
given property in attempt to reduce the property's assessment and
real estate taxes.
• Tax Base: Assessed value of local real estate that a school
district may tax for yearly operational monies.
• STAR: The New York State School Tax Relief (STAR) Program
provides exemption for school taxes for all owner-occupied, primary
residents, regardless of income. Senior citizens may qualify for an
enhanced exemption.
• Reassessment: A reassessment is a systematic analysis of
all locally assessed properties (both commercial and residential) to
achieve a stated uniform percentage of value. The goal of a
reassessment is to assure that each assessment reflects current
market prices and that each property owner pays only their fair
share of the tax burden. With a reassessment comes a shift in the
tax burden to those whose property values have risen faster than
average. This process does not result in a windfall of new revenue
for the town, county, or school district nor does the reassessment
change the total amount of taxes that the school district must
collect; it merely redistributes who pays them. In theory, rising
assessments will result in a decrease in the tax rate (everything
else being equal), as there is now a larger tax base from which the
school may generate the same amount of tax dollars. If a property
owner's assessment doubles, their tax bill will not double - in
fact, it may remain about the same, increase slightly, or even
decrease depending on the final tax rate.
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