ACTION ITEM Revenue Shifting Match Tax

1. Superintendents Recommendation:

It is requested that the Christina School District Board of Education provide direction, to the
District, on their intent to levy a new match tax, which may be authorized by legislative
action (State Operating Budget). The Board will set the tax rates in the July Board meeting,
at which time the State operating budget will have been finalized. The District recommends
approval of the increased taxes to minimize the impact on decreases in education services.

2. Background/Analysis:

The State of Delaware has faced, for a number of years, a structural deficiency. Stated
simply, there is insufficient revenue to support expenses. The State projected deficiency,
as of 4/11/ 2017 is ~$386 Million for fiscal 2018. To address the structural deficiency, the
Governor is suggesting a combination of actions directed toward both revenues and
expenses.

The projected impact on Christina School District is ~$5.86 Million

Statewide CSD Available to "Match"

Ed Sustainment $ 21,974,400.00 $ 3,133,010.50 Yes
Transportation $ 3,519,400.00 $ 730,281.66 Yes
Division II energy $ 455,672.19 $ 60,797.82 No
Operation $ 13,584,229.21 $ 1,936,777.92 No
Total $ 5,860,867.90
Total "Matchable" $ 3,863,292.16

Noted above is a category of Available to Match. One of the proposals under discussion
is to provide authorization to School Boards, with taxing authority, the ability to raise taxes
against assessed property value. Based on the amount above, and allowing for
delinquency (assume 5% vs. 10% authorized by Delaware Code), the tax rate necessary to
raise ~$3.9 Million is 7.3. Property taxes are based per $100 of assessed value
(assessed value is not the property value). For example, a home in Windy Hills (Newark)
recently sold for $224,000; has an assessed property value of $63,700; would face a
potential annual property tax increase of $46.50.

BOARD OF EDUCATION
 Tax Rate impact Assessed Value Increase
$ 60,000.00 $ 43.80
Avg Assessed Value ~ $64,100 $ 64,100.00 $ 46.79
$ 80,000.00 $ 58.40
$ 100,000.00 $ 73.00
$ 125,000.00 $ 91.25
Note - Taxes are calculated per $100 of Assessed Value

3. Fiscal Impact: Shift of funding from State to Local

4. Prepared By: Robert A. Silber, Assistant Superintendent and CFO

5. Board Meeting Date: April 18, 2017

BOARD OF EDUCATION