Once you have received the email from the system notifying you that your advisor has set the initial rate, you will log into the portal to view this initial rate and to update your overlay amount and fund balance to reduce taxes.
At this point in time, it is recommended that you save an initial tax rate report for your own records. You can view a draft of your tax rate report by selecting the printer icon on the Tax Rate screen or by selecting the report from the drop down list on your Reports tab.
Go to your tax rate home page and select the continue button to view the tax rate calculator’s overlay and surplus section. Here, update the amount of fund balance to reduce taxes and the overlay amount. After you make a change to the fund balance to reduce taxes or to the requested overlay amount, you should click the green “Calculate” button. This will recalculate the tax rate at the top of the page.
Requested Overlay Adjustment Process
The requested overlay submitted on the 434 form (Revised Estimated Revenues) is used to generate a preliminary tax rate. Due to how the tax rate calculation process applies rounding, there are fractional cents that are removed from the process. This adjustment is accounted for in the overlay and as a result, the overlay must be adjusted after the preliminary rate is created. The process itself begins with the initial overlay, tax effort, and tax base. These values are entered into the tax rate equation shown below:
The resulting tax rate is rounded to the nearest cent if necessary. If rounding occurs, it is important to determine the effect of the rounding on the total tax effort using the following equation:
Comparing the initial tax effort to the new tax effort indicates what change, if any, should be made to the initial overlay. This produces the final requested overlay.
The process of adjusting the Overlay is iterative and it may be helpful to refer to the Overlay Adjustment and Final Overlay values in the Tax Rate table. The Final Overlay is generally a good starting point for the Requested Overlay amount.
At any point in time, you can select “Save” at the bottom of this page to save your current progress and return to your Tax Rate page to run a new report that reflects the changes you have made so far for the Overlay and Fund Balance to Reduce taxes.
Once you are satisfied with the changes made, click “Complete Municipal Review” at the bottom of the page. The tax rate will be sent to your municipal advisor and the status of the rate will change to “Municipally Reviewed Rate”, indicating that you have completed your step of the review. At this point, you will no longer be able to access the Tax Rate calculator. You will still be able to view and print a draft Tax Rate report with the information that you submitted.
When the DRA has completed their review of the tax rate, the system will notify the municipal administrators that the rate has been finalized. The tax rate status indicator on the home screen will change to a green box with the text “Tax Rate Set” and most of the tax rate status checklist items will be marked as completed.
On the Tax Rate page, the status will be updated to “Tax Rate Set”. The tax rate calculator page will be available for viewing, but the values will not be editable. The final tax rate report, without draft watermarks, can be printed at this time.
Final Tax Rate Report
The final tax rate report contains five pages. The first page provides the rate calculation overview along with the tax effort of any associated village districts and the calculation of the tax commitment for the municipality.
The second page contains the detailed appropriations and revenues breakdown for the municipality, the county, and both local and state education values. Appropriations and revenues are presented in separate columns. At the bottom of this page is the valuation information from the MS-1 and MS-1V forms.
Page three contains the tax commitment verification that shows the total tax commitment with the half-percent high and low thresholds. The municipality’s tax collector must complete and sign this page. The signed form must be scanned and uploaded to the portal.
The fourth page summarizes the requirements for semi-annual or quarterly billing and presents the relevant values for associated village districts.
The fifth page provides a brief guide for retained fund balance amounts. At the top of the page is the Enterprise Funds and General Fund Operating Expenses amounts for the year, followed by a fund balance retention table that shows the current fund balance retained and different retention levels – from 17% (the maximum recommended) down to 5% retention.
Completing the Process
To complete the tax rate setting process, submit the Tax Commitment (1/2% verification), a copy of the final tax bill, the tax warrant, and the tax summary. The signed tax warrant and tax summary can be uploaded as a single document ( “Signed Property Tax Warrant & Summary”) or as two separate documents. All of these required documents must be uploaded under the “administrative forms” section of the documents table presented at the bottom of your portal home page.