Date: December 6, 2013
To: School District Superintendents
Charter School Directors
From: Tom Melcher, Director
Division of School Finance
Subject: Tax Shift Buyback Based on Minnesota Statutes § 16A.152 and November Forecast
As required by Laws 2013, Chapter 116, Article 7, Section 20, state education aid payments at 90/10 and early levy recognition at 23.1% were implemented in October based on the estimated unrestricted general fund balance at June 30, 2013.
The state’s November Forecast of revenues and expenditures projects a positive unrestricted general fund balance of $1.086 billion at the end of the current biennium, June 30, 2015. This triggers repayment to school districts of the remaining portion of tax shift in this year under Minnesota Statutes §16A.152, estimated at $246 million. After the $246 million school tax shift payback and a $15 million payback to the state airports fund, the remaining unrestricted state general fund balance as of June 30, 2015 is projected to be $825 million.
Although this change will be implemented in the December 15 state aids payment period, Minnesota Statutes § 127A.441 provides that tax shift adjustments to aid occur as late in the fiscal year as possible. Therefore, aid payments due to the elimination of the tax shift will be made on June 20, 2014. When combined with the earlier tax shift payback announced in October, the total amount of tax shift to be paid back on June 20, 2014 is estimated to be $551 million. Changes to local property tax shift receipts in May and June that are used in the metering formula will affect the pattern of state aid payments through the remainder of the year slightly.
Contact Judy Kuck or 651-582-1623 if you have questions regarding this information.