11/13/1996 BOARD OF SELECTMEN Executive Session (4)

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SANDWICH H D O_^ FINANCE A Report for the Sandwich Public Schools Municip.al Revenue Growth Factor F To understand the minimum contributions for FY 94 and subsequent years, we must First understand the municipal revenue growth factor. This is meant to measure the overall in crease in available revenues to the town, and therefore the town's ability to increase its support for the schools. The town's growth factor for FY 94 was 2.99°1a; Fo r FY 95 it was 3.25%'0. Since these rowth factors are very low for a town with such rapid population g growth (the �e g statewide aver growth factor was 3%), it is help Ful to understand how the number was calculated. We review the figures for FY 95. Revenue rvwth Factor The revenue growth factor re- 95 f ch fleets the ear-to-year change in FY 94 FY Y 'f 17 349 1 x',349 property 11, it three factors - tai levies, FY 94 Levy Lim +2.5% 434 state general revenue sharing, +New Growth P and local receipts. The increase 'F 2.57°Io of Base446 in property tax levies is calculated 3 Tota!Pro erty Tax '�7,349 18,229 5.1% as a three year average of past p �} gears' new growth; in Sandwich's General Revenue Sharing 574 573 -2% case this comes to 2.57%. when 14� added to the 2.5% increase al- `'' FY 93 Actual Local Receipts '�,572 lowed under Proposition 2 112, Estimated FY 94 Recei is 1,437 -14.1 f - P this means that the property levy F alone could grow at 5.1%. (If Tatar 19,595 20,238 3.28% Sandwi ch should experience articular) lar e rowt�i in one ear,the formula has provisions to set a.s ide this year}. T e }. particularly � � y kt, town's state aid receipts for FY 95 will be down slightly From the previous year ' local receipts for FY 94(which was onl half com feted when DOR Finally, the es�zma�ed p �' P made these calculations in January of 1994)were 14.1% below FY 93 actual receipts. when added together,FY 95 revenues of Actual Receipts as k K { $20.328 million are 3.28% above the FY 94 base. % afEstimated FY86 165.5% A comparison of estimated versus actual receipts in recent years FY87 114.5% 4 estimates local revenues as 140'2��° shows that Sandwich typically under FY89 176.3°/° shown in the table at right. In past years, revenue estimates have 118.4% FY90 averaged at least 15% below actual revenues. Had the estimatesFY9. 105.4% y for FY 94 been equal to FY 93 actuals instead of calling for a 14% 98.2% � FY9Z dropunreasonable in li ht of the ast record ,the rowth g P g FY93 119.7°ro factor for FY 95 would have been 4.5% instead of 3.28%v. In fact, revenues for FY 94 appear to have come in below the estimates. Page 8