Here is an explanation of the terms used for the calculation:
The District has two voter-approved overrides and they provide the financial support necessary for the District to be exceptional instead of average. The Maintenance & Operations (M&O) Override helps with maintaining small class sizes and allows the District to keep offering diverse programs, even during a time where many Districts are eliminating programs. The Capital Override has helped support the District's Technology Plan which has received National Recognition both from the National School Board and the New York Times.
The District utilizes Bonds to maintain its facilities and to purchase pupil transportation vehicles, as outlined in the District's Capital Improvement Plan. A Bond is a debt for a District, similar to how a mortgage is a debt for a homeowner. When a homeowner needs to renovate or remodel their home, they will often refinance their home, cash out equity, and maintain their current mortgage payment by extending the life of the loan. The District manages Bond Debt in a similar fashion by using a tiered repayment model. This allows the District to get access to the funding it needs without making significant impacts on the tax rate.
Bond Cash Balance
The District has a Bond payment due on July 1 every year. So, at a minimum, the June 30 cash balance must be sufficient enough to cover this payment. The Bond payments listed above will actually include 3 payments; July in the current year, January next year and July next year. By subtracting out the Bond Cash Balance the District is able to tax for just the two payments that are necessary.
The total amount of funding that needs to be generated by the Secondary Tax. It equals Overrides + Bonds - Bond Cash Balance.
Secondary Assessed Value
The total taxable value of all of the property within the District including SRP (Salt River Project - utility company). This amount can increase or decrease significantly from year to year, based on fluctuations in property values, and will have a significant impact on the rate. However, it will also cause the tax amount for the average home to remain constant. For example, a 10% decrease in the Secondary Assessed Value will cause an 11% increase in the tax rate but a home that also decreased by 10% will pay the exact same tax. $100,000 (home value) x 1.6598 / 100 = $165.98 tax and $90,000 (home value) x 1.8442 / 100 = $165.98 tax. So if the tax rate changes based on a change in the Secondary Assessed Value, the impact to the homeowner is dependent on how well their home is maintaining its value in comparison to the average home.
Now that you know the terms here is the calculation:
|2011 Secondary (Full Cash) Tax Rate Calculation|
|Bond Cash Balance||-||$15,284,252|
|Total Secondary Assessed Valuation||/||$2,107,355,670|
|Secondary Tax Rate (Multiplied by 100)||=||1.6598|