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The "Transfer to Capital" line in the General Fund Budget relative to the Levy Limit Formula
Q.) Must a budgetary appropriation be expensed within the same fiscal year in order to be included as part of the "Capital Levy" in the levy limit formula. For example, "Transfer to Capital", can a district appropriate money in this line but not expend it; rather put it into a reserve fund to be part of the "below the line" exclusion in the levy limit formula along with other Capital Debt?
A.) The NYSED Tax Cap Guidance document (March 2012), is the best source to explain how a capital expense is to be handled appropriately? It is pointed out that question # 3 (page 8) in the document and the list of account codes (page 9) help demonstrate that a Transfer to Capital amount, in and of itself, has never been allowed to be part of the capital exclusion calculation from day 1. In addition, It is reinforced in question #10 of the “Questions and Answers”. This answer emphasizes that it has to be expenditures that districts actually expect to incur in the current year.
In summation, a Transfer to Capital is not an allowable “projected expense” so putting money in a reserve for future purposes (if it is not expected to be spent within the same fiscal year) does not become part of the capital exclusion for the given year. Also, it should be noted that once the money goes in to a capital reserve that will reduce the allowable capital expenditures in the capital exclusion calculation in the year that a district spends the money out of the reserve so it theoretically doesn’t help for purposes of the Tax Cap.
Transportation Aid Ratio’s
NOTE: The following school years are illustrative only; this would go for all school year scenarios…
Q.) The 2011-12 Estimated Transportation Aid Output Report (TRA-EST) does not include the State share ratio for transportation aid for the 2012-13 fiscal year. Where would this number be obtained?
A.) The Tax Cap Guidance published March 2012 states that districts should use the “applicable Executive Budget computer runs” when calculating amounts to be deducted from capital expenditures in subsequent years. The transportation backup run from the 2012-13 executive budget computer run contains the amount for estimated 2012-13 Transportation Capital aid. This backup run, as well as the SA12-13 computer run displaying aid based on the enacted 2012-13 budget, also displays the selected Transportation Aid ratio for estimating 2012-13 aid.