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Content This dissertation has been microfilmed exactly as received 6 6 -1 1 5 8 4 PERKO, John Elliott, 1935- PURDY, William Marsh, 1925- THE INTERRELATIONSHIP OF THE ASSESSMENT CALENDAR, SCHOOL BUDGET CALENDAR, AND FISCAL YEAR. Both authors received degrees at University of Southern California, Ed.D., 1966 Education, administration University Microfilms, Inc., Ann Arbor, M ichigan Copyright by John Elliott Perko and William Marsh Purdy 1966 T V ' . * _ THE INTERRELATIONSHIP Of/aSSESSMENT CALENDAR, SCHOOL BUDGET CALENDAR, AND FISCAL YEAR A Dissertation Presented to the Faculty of the School of Education The University of Southern California In Partial Fulfillment of the Requirements for the Degree Doctor of Education by John Elliott Perko and William Marsh Purdy June 1966 This dissertation, written under the direction of the Chairman of the candidate's Guidance Comm ittee and approved by all members of the Committee, has been presented to and accepted by the Faculty of the School of Education in partial fulfillment of the requirements for the deyree of D octor of Education. Date....... J-une...l966............. ... / Dean Guidance Com mittee Chairman TABLE OF CONTENTS Chapter I. II. III. IV. THE PROBLEM ................................. A SURVEY OF THE INTERRELATIONSHIP OF THE ASSESSMENT CALENDAR, SCHOOL BUDGET CALENDAR, AND FISCAL "VEAR IN THE UNITED STATES ............................. Survey of the Forty-Nine States Chapter Summary IN-DEPTH STUDY OF THE STATE OF NEVADA . . . Assessment Calendar Budget Calendar Fiscal Year Chapter Summary IN-DEPTH STUDY OF THE STATE OF CALIFORNIA . Assessment Calendar Budget Calendar Fiscal Year Tax Rate Limitations School District Budgeting Practices Chapter Summary SUMMARY, SUMMARY OF FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS ...................... Page 1 26 171 18S 231 Summary Summary of Findings Chapter Page Conclusions Recommendations BIBLIOGRAPHY........................................... 248 APPENDICES............................................. 2 58 APPENDIX A ...................................... 259 APPENDIX B ...................................... 268 APPENDIX C ...................................... 272 APPENDIX D ...................................... 2 76 APPENDIX E ...................................... 280 APPENDIX F ...................................... 283 CHAPTER I THE PROBLEM Introduction The fiscal year as established for all public agencies in California by the constitution of the state of California commences on July 1 of one calendar year and ends on June 30 of the next succeeding calendar year (62: Article 20, section 5). The budget calendar of school districts in California, as prescribed by the Education Code, provides for the adoption of a tentative budget on or before July 1 but does not allow adoption of a final j j budget until the first week of August (64:sections 20601 and 20651). This results in California school districts operating for over a month without a legally adopted budget. To compound the problem, the assessment practices in California are such that actual complete assessed valua tion data are not known prior to the adoption of the final budget. 1 2 Administrators and" governing boards must make decisions concerning the employment of staff, salary schedules, summer maintenance, and other expenditures several months prior to the determination of the assessed valuation and the adoption of the district budget. These decisions are typically made on the basis of projected estimates of need and ability to finance the educational program. If these estimates are grossly inaccurate, the school district could be placed in considerable financial difficulty. Statement of the problem The purpose of this study was to determine the best interrelationship among the assessment calendar, school budget calendar, and fiscal year which would facilitate administrative decision-making. More specifically, the study sought answers to the following questions: 1. What dates would best describe the fiscal year? 2. What dates would best describe the assessment calendar? 3. What dates would best describe the budget calendar? Importance of the problem — ■ School budgeting as a three-part process has been symbolized by De Young in his classical equilateral triangle, as follows (12:7): Educational Plan After the establishment of the educational plan with careful and deliberate thought, it is converted into an amount of money described as the spending plan which must be matched with a revenue or financing plan. It is the third phase of the triangle, the finane ing plan, with which this study will be most concerned. Because of the particular interrelationship among assess ment calendar, budget calendar, and fiscal year described for public school districts in California, the financing plan of the budgeting process has become a superficially limiting factor to the educational program. As will be seen later, factors of business and finance are becoming controlling factor in the educational planning of Califor nia school districts. The concern of the authors can per haps best be illustrated by a statement made by Smith in his book, Business Administration of Public Schools; "A budget that is built primarily for the business adminis tration, and only secondarily for the educational, is likely to be faulty in some essential respects." (25:8) To understand the problems imposed on California public school districts by the existing interrelationship among the fiscal year, assessment calendar, and budget calendar, a brief outline of significant legally-required dates is presented: March, first Monday. . . Date of taxable status for all property (63:section 751) May 1 through 15 . . . . All teachers to be reemployed for the next succeeding school year must be so employed by the govern ing board of the district (64: sections 13258 and 13443) July 1, on or before . . A tentative budget must be filed with the county superintendent of schools (64:section 2 0601) July 1 July, first Monday July, third Monday August 8 ......... (August 10 in dis tricts of 10,000 A.D.A. or more) Beginning of the fiscal year (62:Article 20, section 5) Assessor must complete the local roll (63:section 616) Local roll equalized by the county board of equalization (63:section 1603) (Special laws apply to Los Angeles County only.) Final school district budget must be adopted (64:section 20651) August, first Monday . . Assessment period ends for state assessed properties (63:section 753) August, third Monday September 1 State assessed roll is trans mitted to the county auditor (63:section 756) County board of supervisors sets the tax rate (64:section 20705) As can be seen from this schedule, a rather large percentage of the budget must be committed several months prior to its adoption and prior to any concrete knowledge % of revenue data. Wright stated the problem very well when 6 he wrote: School districts are required to spend a large per cent of the annual budget several months be fore its final adoption. In fact, the law which requires that teachers shall be employed unless notified to the contrary on the 15th day of May, obligates at least 60 to 65 per cent of the budget six weeks before the tentative budget is required to be filed. Other commitments such as repairs to buildings and equipment during the summer, and orders for school and operational supplies may well bring the total expenditure commitments to as high as 90 per cent of the proposed budget, when in effect there is no budget or any certainty regarding the income for the year. (77:179) An often suggested solution to this problem is that the budget calendar be changed so that a final budget is adopted in close proximity to May 15. Such a change by itself tends to compound the present problem by removing ! the adoption even further from the determination of assessed valuation figures. If districts did not have statutory limitations imposed on the tax rate, such a change might be a practical solution. It would be possible for the local district to levy whatever tax rate was neces sary to finance the educational expenditure plan in strict compliance with De Young's budgeting principles mentioned above; but, with tax rate limitations and with most dis tricts levying at these maximum rates, the knowledge of the new assessed valuation figures is necessary to insure 7 the district does not legally obligate itself beyond its capabilities to finance those obligations. The net result of tax rate limitations and the inaccessibility of known assessed valuation figures prior to the adoption of the budget is to place undue emphasis and attention on the assessed valuation, which . .in reality has no relationship to actual needs. It is only an ejqpression of an equitable comparative rating of prop erty for purposes of values, on the assumption that each dollar of value should support its just share of funds to meet the needs." (77:185) Concern over the increased emphasis on the assessed valuation is expressed in another way by the National Tax Association: After a unit of government has reached its maximum rate limitation, its future budgeting policy is largely in the hands of the assessor. The decision made in his office as to the percentage of market value that will be used for assessment purposes is almost controlling .... Thus we have the spectacle of the county assessor, whose sole func tion is to find and value property at its full value, charting the fiscal policy of most local governments. (71:166-67) In 1955, a study was made by the Senate Interim Committee on State and Local Taxation relative to county, city, and district finance, budgets, and property taxes. Testimony was presented by taxpayers groups and county auditors to support an earlier completion date for the budgeting process. While the committee came to the con clusion that the budgeting process should be completed prior to the commencement of the fiscal year, no legisla tive change took place (39). The 1956 Assembly Interim Committee on Municipal and County Government studied the possibility of changing the fiscal year to a calendar year with the purpose of solving two problems: that of unknown assessed valuation data at the time of budget preparation and adoption and the delay in property tax revenue of five months after the fiscal year commences. The conclusion reached at the J j close of a hearing held on September 25, 1956, was to introduce a constitutional amendment resolution at the next general session of the legislation as a way of bringing the matter to the attention of all public agencies and to force further study (41). However, again no change re sulted from the work of this committee. Other references to the problem under study can be traced back through the three decades immediately pre ceding the 1950's to illustrate the long-standing concern for determining a rational articulation between fiscal year, budget calendar, and assessment calendar. As of this date, no corrective action has taken place. The emerging pattern tended to indicate that polit ical pressure, self-interest, and splintered attempts at change have all played a part in blocking any action to correct what at first glance appears to be a purely mechanical problem. It was intended to undertake the task of studying all aspects of the problem; to consider the interests of all groups; and to arrive at a solution, or solutions, which could result in action to improve the relationship between the three factors, if, in fact, such a solution could be found. Procedure During the survey of the literature it was found that basically two problems existed whenever change was considered or proposed. First, the question was raised of what other states were doing in this regard and whether or not another state had arrived at a good solution. The second problem was that proposals were made by one group or another without the involvement of representatives from 10 all the governmental agencies concerned with the problem. Because it was the intent that this study would result in legislative change, a research design was decided upon which would meet the problem areas mentioned above. A survey was made of the literature in the areas of school, municipal, and governmental finance. The materials covered were books; publications of the govern ment, professional associations, and other organizations; periodicals; unpublished materials; and statutory provi sions . A narrative letter was sent to each head state educational officer in the forty-nine states outside of California requesting information concerning their proce- J J dures and problems in the three areas under study. Per mission was received from Dr. Leonard Grindstaff, Riverside County Superintendent of Schools, to use his name in send ing the narrative letter to the forty-nine state educa tional officers. A copy of the letter used is included in Appendix A. A follow-up letter was sent if a response was not received within three weeks. A second follow-up letter was sent if no response was received from the first follow- up letter, and in the case of three states, a third follow- 11 up letter was sent. The net effect of this procedure was 100 per cent return on the survey! The results of the survey were analyzed and are reported in Chapter II in summary fashion. Concurrently with the survey of the forty-nine states, sponsorship was obtained from the California Association of Public School Business Officials. Because of the interest of this association in finding a practical solution, the board of directors created a five-member committee, including the two authors, to aid in the study. A meeting was held with the committee to ascertain areas of concern and points of emphasis for inclusion in the study. Because of the political overtones inherent in the problem and the emotional involvement on the part of some members of the professions, it was decided that the inter view technique for data collecting would be most appro priate. As Good, Barr, and Scates stated, "People gener ally do not care to put confidential information in writ ing; they may want to see who is getting the information and receive guarantees as to how it will be used . . . ." (16:378) 12 It was also decided that the team interview tech nique would be employed as suggested by Borg in his text, Educational Research: An Introduction. The advantages of this technique as outlined by Borg are primarily threefold. With one interviewer recording and the other doing the major portion of the interviewing, time is saved in the interview session, which is an important consideration of interviewing high-status respondents. In cases where the respondent reacts negatively with one interviewer, it is possible for the other interviewer to come to the fore as the major interviewer, thus making it possible for the interview to continue on a positive basis. With two inter viewers reviewing the notes and preparing material for analysis, the chances for personal bias and unconscious selection are greatly reduced (6:232-33). Initially proposed respondents were selected by position only on the basis of concern with the problem and/or possible involvement in the accomplishment of change, if change were found to be necessary. After minor corrections, the following list of respondents was approved by the doctoral committee. 1. Two county assessors recommended by the State Association of County Assessors of California Two county auditors recommended by the County Auditors Association of California Two city administrators recommended by the League of California Cities Two county administrative officers recommended by the County Supervisors Association of California Two school business officials recommended by the California Association of Public School Business Officials Two professors of public school administration recognized as authorities in the field of school finance Two professors of public administration recom mended by the dean of the School of Public Administration, University of Southern California The county assessor of Los Angeles County The chairman of the State Assembly Committee on Municipal and County Government The chairman of the State Senate Committee on 14 Local Government 11. The chief of the Division of Public School Administration, State Department of Education 12. A member of the State Board of Equalization, representing the fourth district 13. A former county auditor of Los Angeles County who was instrumental in proposing changes in the budgeting process to the state legislature in previous years 14. The director of research of the California Taxpayers Association 15. The president of the California Association of . Chamber of Commerce Executive Officers Anonymity as to what each said in the interview was guaranteed to each of the respondents to encourage candid discussions in the interview situation. An inter view guide was constructed after studying texts by Borg; Good, Barr, and Scates; Good; and Rummel (6, 16, 15, 23). A sample interview guide was then constructed, and pilot interviews were made with a county auditor, a city manager, a county manager, a county assessor, and a school business manager. After the pilot interviews were made, revisions 15 were accomplished on the interview guides and presented to the chairman of the doctoral committee for approval. Contact was made by telephone with all of the selected respondents to establish appointments for inter views. The telephone appointment was confirmed by letter, which delineated some background to the problem under study I and indicated the type of information to be requested from the respondent. Appendix C contains a sample of this follow-up letter. .After each interview was completed, the notes were reviewed, analyzed, and a summary of the inter view session was typed. Upon receipt of responses from all of the forty- nine states outside of California, the state of Nevada was selected for further study. The basis for this selection was threefold in nature: 1. The state of Nevada had changed from a calendar year to a fiscal year in 1955 and could shed some light upon the reasons for changing and the problems inherent in making such a change. 2. The budgeting process in Nevada was such that a budget was adopted on the basis of known assessed valuation data and prior to the 16 employment of staff and prior to the beginning of the fiscal year. 3. A new budget act had been adopted by the state legislature in 1965 which was proposed by a combined effort of the school business offi cials, county auditors, city managers, and county managers. It was expected that this could shed some light on how change could best be made in the legislative arena. The respondents to be interviewed in the state of Nevada were selected by contacting Dr. J. L. Glaspey, Assistant Superintendent— Business Services, Clark County School District, for recommendations. Appointments were | i made and interviews held with the following: 1. The county manager of Clark County 2. The chairman of the Assembly Ways and Means Committee 3. The president of the Sierra Nevada Power Company 4. The county assessor of Clark County 5. The city manager of Sparks, Nevada 6. The county auditor of Washoe County 7. The state assistant superintendent in charge of 17 business affairs, State Department of Educa tion , Nevada 8. The executive officer of the State of Nevada Tax Commission 9. The assistant superintendent— business services, Clark County Schools The same techniques were used in interviewing respondents in Nevada as were used in the state of Califor nia. The study was accomplished by the efforts of two students with the work shared on an equal basis. Each student has assumed responsibility for the total study including the findings, conclusions, and recommendations j i evolving therefrom. Scope of the study The study was national in scope and included in- depth studies of California and Nevada. Public agencies other than public school districts were investigated to determine problems and recommendations for improvement in the budgeting process. Delimitations The national survey was limited to communications with the chief state school administrator to identify statutory provisions, practices, problems, and recommenda tions for change as they related to school districts in each state. The in-depth study of the two states was delimited to communications with representative authorities in each of the fields concerned with the problem. Limitations The very nature of the interview technique was a limiting factor because of the subjectivity by respondents and the interpretation of responses by the interviewers. A further limiting factor was the limited number of respondents involved in the study which was dictated by the interview method of research. Definitions of terms used For clarity of understanding, the following terms are defined as used in this study: Assessed valuation.— The taxable value placed on all property subject to property taxation is the assessed 19 valuation. This is normally a fraction of the cash value. Assessment.— Assessment is the official act of discovering, listing, and appraising property for taxation purposes (67:26). Assessment calendar.— Dates prescribed in the assessment procedure of establishing values on property by which certain things must be accomplished as prescribed by the revenue and taxation code constitute the assessment calendar. Assessment practices.— The complete program uti lized by assessing officials to set values on property is referred to as assessment practices. Assessment year.— The period beginning with the j I lien date and ending immediately prior to the succeeding lien date for taxes levied by the same agency constitutes the assessment year (63:section 118). Assessor.— The assessing officer of a county, by whatever title he may be known, is referred to as the assessor (63:section 128). Board roll.— The board roll is that part of the secured roll containing state assessed property (63; section 109). 20 Budget.— a plan fdr expending funds to accomplish an agreed upon program within the limits of the anticipated revenue is referred to as the budget. Budget calendar.— The dates established by the Education Code for accomplishing certain processes in the budgeting procedure set the budget calendar. County board.— The county board of supervisors, when sitting as the county board of equalization, is referred to as the county board (63:section 119). Current roll.— The roll containing the property on which current taxes are liened is the current roll (63: section 125). Desirable.— The term "desirable" is used in its broadest sense: that which is best for all public agencies, taxpayers, parents, and students. Final budget.— The budget adopted finally by the governing board, on which basis the tax rate is set, is the final budget. Fiscal year.— The fiscal year is an annual period for financial purposes which may begin at any time of the calendar year and end twelve months later. Improvements.— Improvements include "(a) all build- 21 ings, structures, fixtures, and fences erected on or affixed to the land, except telephone and telegraph lines; (b) all fruit, nut-bearing, or ornamental trees and vines not of natural growth and not exempt from taxation, except date palms under eight years of age." (63:section 105) In general.— In general would mean all respondents to which referred, less one, even though there was unani mous agreement. Each respondent was guaranteed anonymity so this term is used if there was no more than one respond ent not in agreement with the rest. Lien date.— The lien date refers to the time when taxes for any fiscal year become a lien on property (63: i section 117). | Local roll.— Those parts of the secured and unse cured roll containing property which it is the county assessor's duty to assess constitute the local roll (63: section 109). Personal property.— All property except real estate is included in personal property (63:section 106). Property.— Property includes all matters and things, real, personal, and mixed, capable of private ownership (63:section 103). 22 Public utilities.— Public utilities are property which is assessed by the state board of equalization (see board roll). Publication budget.--The tentative budget, after it has been examined by the county superintendent of schools office and reapproved by the governing board and sent to the newspaper for publication, is referred to as the publication budget. Real estate or real property.— Real estate or real property includes " (a) the possession of, claim to, owner ship of, or right to the possession of land; (b) all mines,, minerals, and quarries in the land, all standing timber whether or not belonging to the owner of the land, and all I rights and privileges appertaining thereto; (c) improve- ments." (63:section 104) Reappraisal.— A program of revising the monetary true value ascribed to each property and a part of the total program of revaluation is defined as reappraisal. Reassessment.— A program of devising a new taxable dollar value of each property and a part of the total program of revaluation is defined as reassessment. Revaluation.— A program of assigning completely 23 altered values to property as a result of an organized plan for an entire district or county is defined as re valuation. Revenue.— Funds received by any public agency are referred to as revenue. Roll.— Roll means the entire assessment roll (63: section 109). Secured roll.— The secured roll is that part of the roll containing state assessed property or property the taxes on which are a lien on real property sufficient, in the opinion of the assessor, to secure payment of the taxes (63:section 109). Special purpose override tax rates.— The tax rates which a taxing agency may apply to the assessed valuation to provide revenue for special programs authorized by the legislature are defined as special purpose override tax rates. Tax rate.— The tax rate is the amount of tax levy applied against secured or unsecured property to provide the revenue to a taxing agency— usually expressed in terms of mills per dollar of assessed value or dollars and cents per $100 of assessed value. 24 Tax rate limitations.— Tax rate limitations determine the largest tax rate that a taxing agency may levy in accordance with statutory requirements. Taxing agency.— The state, county, city, and every district that assesses property for taxation purposes and reviews taxes or assessments on the property so assessed are taxing agencies (63:section 121). Tentative budget.— A budget which has been tenta tively approved and adopted by the local governing board and submitted to the county superintendent of schools office for examination is referred to as the tentative budget. Unsecured property.— Unsecured property is that on } which the taxes are not a lien on real property sufficient, in the opinion of the assessor, to secure payment of the taxes (63:section 134). Unsecured roll.— The unsecured roll is that por tion of the entire assessment roll not identified as a secured roll (63:section 109). Value, full cash value, or cash value.— The amount at which property will be taken in payment of a just debt from a solvent debtor is its value, full cash value, or cash value (63:section 110). Organization of the study Chapter II presents the results of the national survey. Chapter III presents the findings of the in-depth study of the state of Nevada. Chapter IV reports the findings of the in-depth study of the state of California, including related litera ture and research. Chapter V presents a summary of findings, conclu sions, and recommendations. The study is concluded with a bibliography and appendices. CHAPTER II A SURVEY OF THE INTERRELATIONSHIP OF THE ASSESSMENT CALENDAR, SCHOOL BUDGET CALENDAR, AND FISCAL YEAR IN THE UNITED STATES Introduction The public schools of the United States are responsible for providing the best possible educational program for the youth of the nation. Many limitations are imposed upon the educational program as reflected in the annual budget of school districts in each of the states due to the fact that an unsatisfactory interrelationship exists among the assessment calendar, school budget calen dar, and fiscal year. The function of the budget, as it relates to providing service to the educational program, is well stated by De Young in his book, Budgeting Practices in Public School Administration, as follows: The budget, in its final analysis, should be judged in terms of its contribution to the learning 26 27 of the pupil. This seems a wide gap: the budget— the pupil. Genuine supervision aims to help the child to learn more effectively and economically; in order to assist the pupil, the administrative device of supervision aims to help the teachers help the child. Likewise, the means or instrument called the budget, should find its justification in the help it renders to the pupil, through the teacher, through the materials, and through other facilities, which may be made possible in a greater or better degree through a carefully prepared and well-administered budget. The school budget, then, is a means of rendering educational service. (13:130) This chapter delineates and analyzes the existing interrelationships among the assessment calendar, school budget calendar, and fiscal year of school districts in the states, exclusive of California. The interrelationships of the three areas under study were so diversified among the states that no attempt was made to compare practices or identify and summarize current trends or problems for the public schools of the nation. Therefore, the interrelationships among the assessment calendar, school budget calendar, and fiscal year were reported in summary form only as they pertained to each state. Procedure A narrative letter was developed by the authors to be sent to the chief state school officer in each of the forty-nine states. The letter was typewritten individually for each state in an effort to personalize the survey instrument and encourage response. The final form of the letter was reviewed and approved by the doctoral committee prior to being sent. The letter explained the existing legal requirements re lated to the assessment calendar, school budget calendar, and fiscal year in the state of California. It further indicated examples of resultant fiscal scheduling problems encountered by the school districts of the state. The remaining portion of the letter posed specific questions in the areas of the assessment calendar, school budget j calendar, and fiscal year of the state. The questions were as follows: 1. How are the assessed values of real property established and what part do they play as a base for the support and development of school district budgets in your state? Please indi cate required deadline dates and who determines assessed values. 2. What are the legal deadline dates which must be followed by local school districts in con structing their annual budgets? What are the beginning and ending dates of your fiscal year? If this varies within the state, would you please explain. If there has been a recent change in any of the assessment calendar, school budget calen dar, or fiscal year dates, would you please indicate how recent the change was, a brief description of what the requirements and prrc- tices were before the change, and give your opinion as to why the change was effected. With reference to the relationship between the dates prescribed for the fiscal year, assess ment calendar, and school budget calendar in your state: a. In your opinion is the relationship satis factory? b. If not, what changes would you recommend? c. What recommendations would you care to offer concerning this general problem? If you feel that copies of existing statutes 30 or constitutional law might be helpful in clarifying your answers to the above questions, we would be most grateful for the receipt of pertinent materials. The first group of respondents represented a return of 51.02 per cent. A follow-up letter along with a copy of the original letter was sent if a response was not received in three weeks. An 85.71 per cent return was realized as a result of sending the first group of follow-up letters. Satisfactory replies were received from 93.87 per cent of those who were sent a second follow-up letter. A 100 per cent return was accomplished as the result of a third follow-up letter to the three remaining states! j In many instances, copies of the statutes and other pertinent codes and publications were provided by the respondents. These supplemental materials, along with the responses to the narrative letters, provided adequate data for analysis of existing practices in the areas of the assessment calendar, school budget calendar, and fiscal year in each of the forty-nine states. The remainder of this chapter will delineate and analyze the existing interrelationships among the assess ment calendar, school budget calendar, and fiscal year in each state exclusive of California. Survey of the Forty-Nine States Alabama Assessed values of property are determined by the county assessor in each of the sixty-seven counties of the state of Alabama. The county board of equalization of each county, comprised of three members, hears tajq>ayer protests regard ing assessed values. In 1955, the state legislature authorized the state department of revenue to initiate a program of technical assistance to local assessing agen cies. The department of revenue has a staff of valuation analysts that works directly with the local assessing agencies in instituting standard assessment practices and procedures. The state commissioner of Revenue has authority to change and equalize assessments throughout the state. The state department of revenue, under the direction of the commissioner, is also responsible for assessing all public utilities of the state of Alabama. 32 The county treasurer of each county, the city treasurer of each city, and the county tax assessor must certify in writing on or before September 1 of each year, to the county or city superintendent of schools, the assessed valuation of property on which taxes will be levied during the ensuing fiscal year and the amount of revenue that may be derived for the fiscal year from the tax levy. The annual budget is submitted by each county and city board of education to the state superintendent of education on or before October 1 of each year. There are no legal provisions requiring the posting, publishing, or public hearing of the budget prior to adoption. The budget becomes an official document after review and approval by the state superintendent of education. The fiscal year begins October 1 and ends September 30. Alaska There are three types of school districts in Alaska. City school districts are those that comprise an area within the boundaries of an incorporated municipality but have no property outside this area. Incorporated school districts are those which include an area of not more than 500 square miles but do not contain an incorpor ated municipality within their boundary. Independent school districts are those which include an area of not more than 500 square miles and contain one or more incor porated municipalities within their boundary. The assessed value of all property exclusive of household goods and personal effects is determined by the local affairs agency, in consultation with the assessor for each district. If there is no local assessor for a district, the local affairs agency determines assessed values. The certification of assessed valuation is sent by registered mail to the president of the school board of each district and the state commissioner of education no later than September 16. The district may obtain judicial review of the certified assessed valuation by filing a petition in the superior court of the judicial district no later than ten days after receipt of the determination. The court may modify the assessed valuation only upon find ing abuse of discretion or lack of supporting evidence used in determining the valuation. School district budgets must be adopted by the 34 board of education and approved by the city council in independent school districts and city school districts on or before July 1 of each year for the ensuing fiscal year, j Budget forms are prescribed by the commissioner of educa tion. There are no legal provisions for a public hearing of the budget. The fiscal year for all school districts begins July 1 and ends June 30. The commissioner of education submitted a bill to the 1965 legislature that would require the annual budget for the next succeeding fiscal year to be presented to the city council or borough assembly no later than April 1 of each year. The city council or borough assembly would be [ required to submit a statement of the sum of money to be made available for school purposes within thirty days after April 1. Arizona Local assessing is the primary responsibility of county assessors, one in each of the fourteen counties of the state. They are elective officers, serving two-year terms. The county assessor is responsible for determining the assessed valuation of all property exclusive of public 35 utilities and producing mines, which are assessed by the state tax commission. The county board of supervisors sits as a board of equalization on June 1 of each year for a ten-day period to hear complaints related to assessed valuations. The state tax commission constitutes a state board of equalization with full power to equalize the valuation and assessment of property throughout the state. Proposed school district budgets for the fiscal year are prepared and filed with the county school super intendent and the state superintendent of public instruc tion no later than July 3 each year. The proposed budget and a notice of place and time of public budget hearing are published no later than July 10 in a local newspaper prior to the public hearing and adoption of the budget. Adopted school district budgets are filed in triplicate with the county school superintendent no later than July 12, one copy of which is transmitted to the county board of supervisors and one copy to the state superintendent of public instruction. The school district tax rate is set no later than August 17 of each year. The fiscal year for all school districts begins July 1 and ends June 30. The Arizona legislature took major action in 1963 related to property assessment practices. It provided for an immediate revaluation of all property in the state sub ject to the ad valorem tax; it created twenty-six different classes of property for assessment purposes; and it created a new agency responsible for the establishment and super vision of uniform statewide standards related to the appraisal and assessment of property. It was indicated that, although school budgets are developed and adopted before the assessed valuation is certified, school administrators are able to obtain reason ably good estimates of assessed values from their county assessors. It was further indicated that it would be desirable to have final assessed valuation figures prior to budget preparation and adoption. Arkansas The county assessor of each of the seventy-five counties of the state of Arkansas is responsible for determining assessed values of property. The county assessor is elected for a two-year term. The county equalization boards are appointed to serve for three-year overlapping terms and consist of three members in the major ity of counties. Assessed values are certified on the third Monday in November of each fiscal year. The public service commission is responsible for the assessment of public utilities. The assessment coordination division was created in 1955 by action of the state legislature which in: essence is a supervisory agency responsible for promulgat ing statewide assessment standards and procedures, although the division has no statutory powers of enforcement. The proposed school district budget and proposed tax rate for the coming fiscal year are prepared, adopted, and published in a newspaper by the local board of direc- i tors prior to the annual school election which is held on the last Tuesday of September of the current fiscal year. If the proposed tax rate is defeated at the annual elec tion, the current tax rate continues in effect for the next succeeding fiscal year. The annual school budget is submitted to the state department of education for approval no later than October 1 of the current fiscal year. The annual budget for the next succeeding fiscal year is re viewed and approved by the state department of education 38 and returned to the school district on or before November 1. The fiscal year for all school districts begins July 1 and ends June 30. It was indicated that consideration was being given to revision of the date of the annual school elec tion. Colorado Assessed values of property are determined by the county assessor of each of the sixty-three counties in the state. The county assessor is elected by popular vote and serves a four-year term. County boards of equalization | hear assessment appeals beginning the second Monday in July and must conclude hearings and render decisions no later than July 28. The county assessor must certify the total valuation to each school district on or before October 1 of each year. In counties of less than 400,000 population the county commissioners set the tax rate not later than November 1, and in counties over 400,000 population the rate is set not later than December 1. The state tax commission comprised of three members 39 appointed by the governor is responsible for the assessment of public utility property and has extensive supervisory authority over the assessment of other property. The com missioner prescribes forms and provides assistance and direction to county assessors throughout the state. A constitutional amendment was approved by the voters at the November election of 1962 which eliminated the requirement that property be assessed at its full cash value. The statutes now require that property be assessed at 30 per cent of actual value. The board of education of each school district is required to adopt the annual budget for each fiscal year prior to the beginning of the fiscal year for which adopted! i A notice of the date, the place where the proposed budget may be inspected, and the time set for considering adoption must be published at least once in a newspaper of general circulation prior to the date specified for adoption of the budget. Certified copies of the adopted budget are required to be filed with the state commissioner of education within thirty days after the beginning of the fiscal year for which the budget was adopted. Approximately 75 per cent of the school districts in the state operate on a July 1 to June 30 fiscal period. The remaining districts operate on a calendar year fiscal period. A law was passed at the last session of the legis lature requiring that all school districts be on a calendar year fiscal period no later than January 1, 1967. It was indicated that school districts are not able to determine the amount of tax levy required for the budget at the time of budget adoption due to the fact that assessed values are certified after that time. It was further stated that the newly adopted calendar year fiscal period would bring the fiscal year and tax collection year together and that school districts would no longer be in the awkward position of operating under two tax levies in one fiscal period. Connecticut Assessed values of real property are established by local assessors in the 169 local units of the state of Connecticut. The local units are comprised of 151 towns, seventeen cities consolidated with towns, and one borough consolidated with a town. The units may have a single assessor or a board of three or five assessors, elected or appointed, and serving terms of one to six years. 41 The state tax commissioner has the authority to equalize local assessments on a statewide basis, but this authority is not exercised. Assessors are required by statute to revaluate property every ten years. Town meetings have no control over the revaluation of property. Taxpayers have a right to appeal to the courts regarding assessed values of prop erty. The board of education is required to prepare a proposed budget for the ensuing fiscal year and submit the budget to the board of finance or to the board of select men, if no board of finance is in existence, not later than two months prior to the annual town meeting or board of selectmen meeting at which appropriations are made. A public hearing of the school budget conducted by the board of education is required to be held two weeks before the annual town meeting or board of selectmen meeting at which the school budget is considered. The school budget must be published in a newspaper of general circulation in the town or municipality after the public hearing. A public hearing is held at the annual town meeting or board of selectmen meeting at which the school budget may be decreased but not increased. The fiscal year for schools is July 1 through June 30. The fiscal year dates of towns and cities vary throughout the state, but all changes of fiscal year dates in the future, as allowed by statute, must conform to the July 1 to June 30 fiscal period. The state department of education encourages all towns and cities to move to the uniform fiscal year, July 1 through June 30. It was related that the fiscal scheduling problems of the state were aggravated by the fact that teachers' contracts must be renewed by March 1 of each year or they are automatically renewed by statute. This creates a dilemma for boards of education in that they must attempt to set salaries for the next school year before the actual budget adoption and, in the majority of instances, before consideration of the school budget has taken place. Delaware The county board of assessment is responsible for determining the assessed value of property. The county board of assessment is appointed by the levy court in each of the three counties of the state. No state agency has the authority to change local 43 assessments to equalize them on a statewide basis or to establish assessment ratios in the school districts. The assessed values as determined by the board of assessment of each county are used by each school district in prepar ing an annual tax list. Tax notices are sent out by the receiver of taxes during the latter part of June, thus making it necessary for school districts to send their tax lists to the receiver of taxes before the end of May. The board of education is required to adopt the annual budget for the next succeeding fiscal year before October 15 of the current fiscal year. There are no legal provisions that require the publishing, posting, or public hearing of school budgets. The adopted budget for the ensuing fiscal year is submitted to the state budget com mission on October 15 of the current fiscal year. The state budget commission is comprised of the governor, the secretary of state, the state auditor, the state treasurer, and the state tax examiner. The required appropriation of state funds, as reflected in the adopted school district budgets, is pre sented to the legislature for authorization by the state budget commission for all school districts in the state. The school district budget becomes an official document upon approval of the annual school appropriation by the legislature. The tax rate levied by a school district is approved annually by the electorate residing in the dis trict. There are no legal provisions for review of the use of local funds as included in the annual school dis trict budget by state, county, or municipal agencies after the funds have been approved by the electorate. The fiscal year begins July 1 and ends June 30 for all governmental agencies in the state. Florida The determination of the assessed valuation of all property exclusive of railroad and telegraph property, which is assessed by the state railroad assessment board, is the function of the county assessor. The county asses sor is an elected official in each of the sixty-seven counties of the state who serves a four-year term. Each county has an equalization board authorized to adjust assessments on appeal from taxpayers. The county assessor is required by statute adopted in 1963 to certify an estimate of the total assessed valuation to the 45 county superintendent of schools of each county on or before the first Monday in July. The state superintendent is required to certify the estimated amount of state funds allotted to the county school districts on or before June 15 of each year. The tentative budget for each of the sixty-seven county school districts of the state is required to be pre pared on or before July 15 of each year by the county superintendent of schools and submitted to the county board of education. The county board of education must review and approve the tentative budget, publish the budget one time in a newspaper of general circulation in the county, establish a date for, and advertise the date for, a public ! hearing on the budget on or before August 1 of each year. The annual budget is adopted by the county board after the public hearing and is submitted to the state superintendent for approval no later than August 1. The state superin tendent has authority to revise the budgets only when they have been prepared incorrectly. The budget becomes offi cial when it has been approved by the state superintendent. The statutes provide that expenditures between July 1 and the date the budget becomes official may be 46 made at the same rate as was included in the budget of the preceding year. If increased rates of expenditure are con templated, prior approval by the state superintendent is required. The fiscal year for all county school districts begins July 1 and ends June 30. Georgia Assessed valuations in the 159 counties of the state are determined by the county assessor who is appoint ed by the county commissioners of each county. There are thirty-seven independent city school districts and 159 county school districts in the state. There is a duplica- j | tion of property assessment in the areas comprising inde- ! pendent city school districts in that both county and city assessors assess this property. The assessed valuation as determined by the county assessor is used in computing state aid for independent city school districts. The state auditor is required to furnish a property tax digest for the next succeeding fiscal year which includes assessed valuation to the state board of education on or before February 1 of the current fiscal year. There are no legal provisions wherein the county 47 commissioners or other county governmental bodies act as a county board of equalization with authority to adjust assessments on the basis of taxpayer appeal. A minimum foundation program act passed at the 1964 session of the state general assembly resulted in major revisions of the school budget calendar. As a result of the 1964 legislation, a proposed final budget is required to be submitted to the local board of education for approv al after February 15 but before June 1 of the current ! fiscal year. The state board of education is required to certify the amount of state financial support for the ensuing fiscal year to the governing board of each school district on or before February 15 of the current fiscal i ! year. The proposed budget must be advertised at least once in a newspaper of general circulation in the school district prior to final adoption. There are no legal requirements related to the holding of a public hearing of the budget prior to final adoption. The final adoption budget must be approved by the local governing board before June 1 and two certified copies submitted to the state superintendent of schools no 48 later than that date. The state board of education has the authority to revise the budgets submitted, although the local school districts may appeal to the state board at a scheduled hearing and obtain judicial review if they disagree with the board's decision. The fiscal year is from July 1 to June 30 with the exception of the independent city school districts, whose fiscal year varies throughout the state. It was stated that the relationship of the fiscal year, assessment calendar, and the school budget calendar was satisfactory. Hawaii ■ | The assessed values of property are determined by the real property assessment division which is a branch agency of the state department of taxation. The division plans and administers a comprehensive system of appraisal and assessment of all real property in the state which is comprised of four counties made up of eight principal islands. Branch offices of the real property assessment division are located in the counties of Hawaii, Kauai, and Maui and operate under the standards and supervision of the central office in Honolulu. A board of review in each of the four counties of the state is responsible for hearing taxpayer appeals related to the assessed valuation of property. A taxpayer may also appeal his assessment to a statewide tax appeal court. The school system of the state is established on a statewide basis, with the operational funds appropriated by the state legislature and the school maintenance and construction funds appropriated by the counties. The operating budget of the state school system must be sub mitted by the governor to the state legislature at least twenty days prior to the first day of the legislative session. The operational budget requests from the schools are due in the budget office of the state department of education during the first week of August. The legislature normally convenes during the middle of February. The state department of education, after approval by the state board of education, submits the oper ational budget of the department to the governor's budget staff office by September 15 of the current fiscal year. The school maintenance and construction budget must be approved by the county board of supervisors fifteen days 50 before the ensuing fiscal year begins. In order to meet this requirement the schools' requests are submitted to the building department and finance director's office of ! the county by October 30 of the current fiscal year. After review and approval of the budget by this office the requests are submitted to the budget office of the state department of education for review and approval. The operational budget is presented to the board of super visors forty-five days before the ensuing fiscal year be gins. The beginning and ending dates of the fiscal year for both state and county government are July 1 to June 30.( It was indicated that the present relationship among the dates prescribed for the fiscal year, assessment calendar, and school budget calendar were considered satis factory. Idaho The assessed valuation of real property exclusive of household furnishings and public utilities is estab lished by elected county assessors in each of the forty- four counties of the state. The assessed value of real property is reviewed by the board of county commissioners 51 of each county which also acts as a county board of equali zation regarding assessment appeals by taxpayers. Assessed value of real property is certified by the county commis sioners in December of each fiscal year. The county com missioners are advised by the state board of education by September 1 as to the required levies to meet the state foundation program, and the levies are set by September 15. The assessment of public utilities is the responsi bility of the state tax commission. The state tax commis sion certifies the assessed value of public utilities on the second Monday of January. Considerable revisions of the school budget calen dar and procedures were accomplished by the 1963 legis- j lature. An annual meeting of each school district is required to be held on the date of its regular June meeting of each year. The board of education of each school dis trict is required to prepare and hold a public budget hear ing not later than thirty days prior to its annual meeting. Notice of the public hearing is required to be posted in at least three places in the district and published in a newspaper of general circulation in the school district. 52 The annual budget for the ensuing fiscal year is adopted by the board of education at its annual meeting in June. A copy of the adopted budget is required to be filed with the state board of education no later than July 15. The state board of education has no authority to revise or adjust the adopted budgets as submitted other than to audit and file them. The fiscal year for all public school districts in the state is July 1 to June 30. Illinois The assessed valuation of property in forty of the state's 102 counties is determined by the local township assessor under the supervision of a county supervisor of assessment, to whom they make a report annually by June 30. These assessments are submitted to the county clerk of each county who is responsible for extending the tax levy made by the school districts against these assessments. The county supervisor of assessments works under the standards and regulations established by the state depart ment of revenue and is appointed by the local county board for a four-year term. There are seventeen counties in the southern part of the state that are organized as commission counties. The treasurer of each of these counties is the ex officio assessor. St. Clair County has an elective county board i of assessors and Cook County has an elective assessor. The remaining forty-three counties of the state are under the township governmental organization with the local township assessor of the numerous townships in each county elected for a four-year term, responsible for establishing the assessed valuation of property. Boards of review exist in each of the counties in the state. The boards are responsible for intracounty equalization and the adjustment of local assessed valua tions on appeal from taxpayers. j The state department of revenue is responsible for assessing the property of public utilities within the state. The department is also required to equalize assess ment of property among the counties and prescribe statewide rules and regulations related to assessment. School districts must prepare and adopt the annual budget in the first quarter of the current fiscal year for the next succeeding fiscal year. The budget is required to be made available for public inspection thirty days 54 prior to final adoption. A public hearing of the budget must be held prior to adoption. The date of the public hearing and the availability for public inspection of the ! annual budget are required to be published in a newspaper within the district thirty days prior to the time of the hearing. The adopted budget is used as a basis for deter mining the required tax levy for the ensuing fiscal year and must be filed with the county clerk by the last Tuesday in September, annually. The fiscal year for all school districts in the state is July 1 to June 30, except for the Chicago School District which operates on a fiscal year of January 1 to i December 31. j ! It was stated that the present fiscal scheduling related to the assessment calendar, school budget calendar, and fiscal year is satisfactory. Indiana Assessed values of real property are determined in townships of more than 5,000 population by an assessor elected for a four-year term. In smaller townships the establishment of assessed valuation is the responsibility of the township trustees. A county assessor is elected 55 for a four-year term in each of the ninety-two counties of the state. The local township assessors look to the county assessor for assistance and guidance. Reassessment of real property is required every eight years as a result of legislation enacted in 1959. The local assessor is required to determine and certify the assessed valuation of property to the county auditor by March 1 of each year. A county board of review with authority to increase or reduce the assessed valuation of property on appeal from taxpayers or on its own motion exists in each county. The state tax board is responsible for determining , [ the assessed value of public utilities and railroad prop- j i erty in the state. The state tax board has authority to supervise local assessing equalization and the hearing of taxpayer appeals. The annual school budget is required to be prepared! and published along with the date, time, and place of the public hearing of the budget, in a newspaper of general circulation in the district eighteen days prior to the last Thursday in August. The public budget hearing is held on the last Thursday in August of the current fiscal year. 56 After the local public hearing, two copies of the budget, as finally adopted by the board of education, are filed with the county auditor, who retains a copy and for wards the other to the state tax board. Budgets of all school districts are reviewed by a county tax board which convenes in September of each year and continues in session until all budgets have been re viewed. School boards have the right to appear before the county tax board to explain or defend their budgets. Tax payers have the right to appear before the board to request an explanation, voice or file protests, or support the school budget. The county tax board may adjust proposed local tax levies and proposed expenditures downward if such adjustment is justifiable in the opinion of the majority of members. The board of education may appeal the decision of the county tax board to the state tax board for final review. Final reviews of all local school budgets are conducted by the state tax board beginning in September and continuing until completed, usually in early December. The fiscal year for school districts is January 1 to December 31. The fiscal year for the state is July 1 to June 30. It was indicated that the present relationship among the fiscal year, the school budget calendar, and the assessment calendar is not satisfactory. It is thought that if the school fiscal year and budget calendar were revised to correspond to the state fiscal year, budgeting and accounting procedures would be improved for school districts and other governmental agencies. Iowa Assessed values of real property are determined by appointed county assessors in each of the ninety-nine counties of the state and by a city assessor in each city with a population of 125,000 or more. In cities of 10,000 to 125,000 population, the city may chose to have a city assessor or have assessment accomplished by the county assessor. Assessors are appointed for a six-year term and selected from an eligibility list established by written and oral examination. The state tax commission is respon sible for the examination of candidates and the establish ment of the eligibility list. The state tax commission is also responsible for the assessment of all railroad property and public utili- 58 ties, supervision of local assessing, and review of equalized assessments on a statewide basis. The assessment of property is required to be com pleted not later than April 30 of each year. The county assessor of each county and each city assessor must certify the assessed valuation of real property to the county or city governing body and the state tax commission on or before the first Monday in July. A board of review consisting of three to five mem bers is in existence in each county and in each city having an assessor for the purpose of hearing appeals from tax payers regarding assessment of property. If a taxpayer does not agree with the decision of the board of review, [ he may appeal to the courts. The local board of education must adopt the annual school budget on or before July 25. The adopted budget is required to be certified to the county auditor not later than August 15. The certified school budget is also required to be filed with the state comptroller after August 15. A public budget hearing is required to be held no later than twenty days prior to adoption of the budget. The notice of public hearing is required to be posted in 59 the school district or published in a newspaper at least ten days prior to the public hearing. One-fourth of 1 per cent of the qualified voters of the school district, but in no event fewer than ten voters who are affected by the pro posed budget, may protest and appeal the budget to the state appeal board no later than the first Tuesday in September. The state appeal board has the authority to make budget revisions and its decision is final. The fiscal year for schools begins July 1 and ends June 30. The school fiscal year is the same as the state fiscal year. It was indicated that the fiscal scheduling relationship among the fiscal year, assessment calendar, and school budget calendar is satisfactory. Kansas The assessed value of property is determined in ninety-seven of the 105 counties of the state by the county clerk. In two of the other counties, the county assessor is an appointed official. In the remaining six counties, the assessor is an elected official. The county clerks and elected assessors serve two-year terms, while the appointed county assessors serve terms determined by the county board of commissioners. The state property valuation department is responsi ble for determining the assessed valuation of railroads and public utilities throughout the state. The county board of commissioners acts as a county board of equalization in hearing taxpayer appeals related to assessment of property. A taxpayer may appeal the decision of the county board of equalization to the state board of tax appeals but must do so within fifteen days after the decision of the county board has been rendered. The decision of the state board of tax appeals is final. The board of education of each school district operating under a board of education is required to approve) a proposed budget and publish the budget, along with a notice of a public budget hearing, in a newspaper of general circulation in the county ten days prior to the public hearing. The publication must be accomplished on or before August 5 of each year. The board of education must adopt the annual budget and certify and file the budget and proof of publication to the county clerk on or before August 25. It is also required that a copy of the adopted budget be certified and filed with the state department of postaudit at the same time. In common school districts the proposed budget is required to be prepared and posted ten days prior to the first Friday in June, and in rural high school districts the proposed budget is required to be prepared and posted eleven days prior to the first Friday in June. The budget for both common school districts and rural high school districts is adopted at the annual meeting held on the first Friday of June and must be certified and filed with ( the county clerk within ten days after adoption. The annual budget is adopted by the electors of a common school district or rural high school district at the annual meet ing. j The fiscal year for school districts in the state is July 1 to June 30. It was indicated that school districts operating under a board of education are in a situation wherein they incur obligations and make expenditures without an approved or adopted budget. It was further stated that the majority of districts have a large enough cash balance to finance the expenditure during that time and that the situation did not appear to be in violation of the state budget law. Kentucky The assessed value of property is determined by the county tax commissioner in each of the 120 counties of the state. The county tax commissioner is elected for a four-year term. There are also numerous overlapping assess ment districts in the state that have a district tax com missioner responsible for establishing the assessed value of property within the district. Estimates indicate that over one-half of the cities and 85 to 90 per cent of the school districts use the county assessment figures. The state assessment section of the state depart ment of revenue is responsible for the assessment of rail road property and public utilities on a statewide basis. The board of supervisors of each county acts as a county board of equalization and hears taxpayer appeals related to property assessment. The state tax commission hears appeals of local taxpayers who disagree with the decision of the county board of equalization. The state tax commission decision is final. There are two types of school budgets in the state. The general budget is used primarily for establishment of the tax rate and must be submitted to the tax levying 63 authority by June 30. The general budget is required to be published in a local newspaper within thirty days after July 1. The tax levying authority can be a fiscal court, the county commission, the city council, or the city com mission, depending on the type of local governmental organization. The tax levying authority must accept the budget and resulting tax rate as established by the board of education providing there are no violations of the law. The working budget of the school district represents a line item analysis of the revenue and expenditure portions of the budget and must be adopted by the governing board and submitted to the state board of education for approval by September 15 of each year. The fiscal year for the majority of school dis tricts in the state is July 1 to June 30. In some instan ces, school districts located in cities of second-class designation operate on a January 1 to December 31 fiscal year. It was indicated that the prescribed dates related to the fiscal year, assessment calendar, and school budget calendar are satisfactory. It was further stated that more crucial problems related to school finance in the 64 state are the restrictions imposed hy statutory tax rate limitations and the fact that in many instances the assessors are under the control of the local school dis trict governing board and administration. It was indicated that a concerted effort would be made at the next session of the legislature to abolish statutory tax rate limitations and to professionalize the tax commissioners by placing them under the state civil service system and requiring a college level preparatory program as a prerequisite to obtaining a position as a tax commissioner. Louisiana Assessed values of property are determined by the parish (county) assessor in sixty-three of the sixty-four parishes (counties) of the state. Assessed values in the one remaining parish are determined by a board of assessors comprised of seven assessors, each from a separate munici pal assessment district within the parish of Orleans. The assessment rolls are certified and filed with the state comptroller by November 15 of each year. The individual taxpayer has the right to examine the assessment role and must do so within twenty days after 65 a legal notice explaining the provision has been published. The taxpayer, after review of the assessment role has been accomplished by the state tax commission, may protest the assessment of his property at a meeting of the policy jury that is called for that purpose each year. Both the state tax commission and the policy jury have the authority to adjust assessments on the basis of taxpayer appeal or justification by pertinent facts. The board of education is required to adopt the annual school budget no later than the first Tuesday in August. The budget is required to be published. The adopted budget is required to be submitted to the state department of education on or before August 15. The j adopted budget is then reviewed by the state budget com mittee, comprised of the state superintendent of public instruction, the state treasurer, and the governor. The state budget committee has the authority to make any changes it deems advisable in the local budgets. The fiscal year for school districts begins July 1 and ends June 30. It was indicated that in actual practice many of the school districts in the state are unable to follow the 66 budget calendar as required by statute but in many instan ces adopt a tentative budget with a final budget being adopted many months later. It was further related that both the state department of education and the state budget committee have been flexible in their attitude toward the situation. Maine Assessed valuations of property are determined by local boards of assessors in municipalities that comprise a single governmental unit. The assessed valuation of property located within school administrative districts is determined by the state board of equalization. Each par ticipating town located in the school district is assessed I according to the proportionate ratio of its assessed valuation to the total valuation of the school administra tive district. There are 12 0 towns in the state that are located within the boundaries of school administrative dis-> tricts. Municipal assessments are determined annually and the assessed valuation roll is certified on or before April 1 of each year. The state board of equalization determines assessed values of property located within school administrative district boundaries biennially and certifies the assessed valuation roll in December of alternate years. The property division of the state bureau of taxa tion is responsible for assessing unorganized territories in the state which are comprised almost entirely of forest land. The taxpayer has the right to appeal the assessed valuation of his property to the county commissioner if he has delivered a complete list of his property indicating his determination of his property valuation on or before April 1. If the taxpayer does not comply with this proce dure the determination of assessed valuation will stand. The annual budget in the school administrative district is adopted by the school directors and submitted to the voters of the district for approval on or before April 1 at a budget meeting. The budget of the school administrative district is considered automatically approved by the voters if not officially approved by the voters prior to April 1. In municipalities, the city council is responsible for approval of the annual school budget and for making the required appropriations of funds. The budget calendar 68 of municipalities is established by charter provisions which vary throughout the state. There are no legal pro visions that authorize review or revision of municipal budget by county or state agencies. In the towns of the state the annual school budget is adopted at the annual town meeting that is held in March of each year in the majority of the towns. The state department of education has no authority over the budgets adopted by the school districts of the state other than for review of the unexpended balances of funds received from the state. The fiscal year of school districts of the state varies considerably, although January 1 to December 31 is the most common. It was indicated that many advantages would be realized in budgeting, fiscal reporting, and school opera tions if all governmental agencies of the state were to operate on a fiscal year beginning July 1 and ending June 30. It was further stated that necessary revisions of the budget calendar dates of the governmental agencies would be required in order to correspond to the July 1 to June 30 fiscal year. 69 Maryland The assessed valuation of real property is deter mined in the twenty-three counties of the state by a super-; t visor of assessments who is appointed by the state depart ment of assessments and taxation from a list of five candidates submitted by the county commissioners of each county. The city of Baltimore is a separate assessment district, and the determination of assessed values is accomplished by the director of the department of assess ments of the city. The state department of assessments and taxation is responsible for establishing the assessed value of railroad corporation and public utility property throughout] the state. The completed assessment roll is certified by January 1 of each year. The county commissioners in the majority of coun ties act as a county board of equalization in reviewing taxpayer appeals related to property assessment. In the counties of Harford, Montgomery, and Washington, a tax appeal court has been created to hear taxpayer appeals, while in the city of Baltimore a board of municipal and 70 zoning appeals serves in the capacity of a board of equalization. A taxpayer may appeal the decision of the local board of equalization to the state tax court and may ; further appeal the decision of the state tax court to the circuit court of the county or the Baltimore city court in Baltimore for final decision. The annual school budget is required to be prepared by the county superintendent of each county and approved by the county board of education between January 1 and July 1 of each year. The school budget must be approved by the county commissioners of each county. The annual school budget of the city of Baltimore is submitted to the city council for approval. There are no legal budget j calendar provisions that specify dates related to the approval and filing of the annual school budget except that the budget is required to be filed with the state superin tendent of schools no later than twenty days before the usual date for levying county taxes. The date for levying county taxes varies throughout the state, and the date for adoption and filing of the budget may be any time after January 1 but must be before July 1 of the current fiscal year. 71 There are no legal requirements related to the posting or publishing of the annual school budget prior to adoption. A uniform fiscal year of July 1 to June 30 is required to be adopted by all governmental agencies of the state no later than 1966 as a result of legislative action taken in 1963. The fiscal year for state government is July 1 to June 30. It was indicated that prior to July 1, 1964, which was the effective date of the legislation related to a uniform fiscal year, twelve county and city governmental agencies were on a calendar fiscal year basis. It was further stated that legislation enacted by the Maryland legislature in 1963, related to a statewide uniform fiscal year and a new school state aid plan, has resulted in a satisfactory relationship among the assessment calendar, school budget requirements, and the fiscal year. Massachusetts The assessed valuation of property is determined by local boards of assessors in each of the 351 cities and towns of the state. Each of the 351 cities and towns comprises a separate assessing unit. In the majority of 72 towns, the board of assessors is comprised of three elected members who serve on a part-time basis, although a few towns have a full-time assessor. The assessors in the thirty-nine cities of the state are either appointed or elected officials and serve on a full-time basis. The assessed valuation roll is certified to the state division of corporation and taxation. The division determines equalized valuation for the state, and this valuation is used in determining school state aid to cities and towns in accordance with the school state aid formula. Legislation enacted in 1955 provides for estab lishment of a state assessment system upon petition by any city or town to the state. Once the state assessment sys- J I tern has been initiated, the assessor or assessors are required to follow the state system although the munici pality may vote to abandon it. The bureau of local assess ment of the state department of corporations and taxation provides continuous supervision and technical assistance to those municipalities that have adopted the system. The state department of corporations and taxation is responsi ble for determining the assessed valuation of public utilities throughout the state. 73 Local taxpayers can appeal to the county commission ers in protesting property assessment. The state appellate tax board, comprised of five members appointed by the governor, has concurrent jurisdiction with the county commissioners in hearing taxpayer appeals. If the taxpayer does not agree with the decision rendered by the county commissioners or the state appeals tax board, he may appeal to the supreme judicial court of the commonwealth for final decision. The annual school district budget of towns is required to be prepared and submitted to the local town finance committee no later than ten days before the end of the town fiscal year. The annual school budget of city ! I school districts is required to be submitted to the city council or board of aldermen for review and approval within forty-five days after the annual city government organiza tional meeting which, in the majority of cities, takes place shortly after the beginning of each calendar year. The annual school budget for the city of Boston is submitted by the mayor to the city council for approval and the budget is voted on by the state legislature. There are no legal provisions that require the 74 posting or publishing of the annual school budget prior to adoption, although in the majority of cities and towns, printed copies of the budget are provided to taxpayers upon request. The fiscal year for the school districts of the state is July 1 to June 30, and the fiscal year for all towns and cities is January 1 to December 31. It was indicated that the school districts are required to keep two sets of accounting records based on the calendar year for appropriation and the school fiscal year for expenditures. It was further stated that many } towns must borrow money in order to operate for the first three months of the calendar year until the annual town meetings are held to appropriate money. In many instances the cities are required to borrow money to meet operating expenses until appropriations have been voted by the city council. It was thought that it would be preferable for school districts of the state to operate on an appropria tion and expenditure fiscal year of July 1 to June 30. Michigan The determination of the assessed value of property is the responsibility of the township assessor in each of 75 the 1,257 towns of the state, the village assessor in each of the 289 villages of the state, and the city assessor in each of the 244 cities of the state. The township assessor is an elected official whose term of office is two years. The assessor of the villages and cities may be elected or appointed. The assessment roll is completed by the assessor of the towns, villages, and cities on or before the first Monday in March. The equalized assessment roll of each of the eighty-three counties of the state is certified and filed with the state auditor general by the state board of equalization no later than the fourth Monday in May. The state auditor general transmits a copy of the equalized | assessment roll to the treasurer of each county. A local board of review in each county is responsi ble for hearing taxpayer appeals related to property assess ment in cases where an error in assessment is evidenced, or if the assessed valuation of property differs consider ably from adjacent property. The taxpayer can further appeal to the state tax commission and the decision of the commission is final. The county board of supervisors of each county is 76 required to equalize the assessed valuation of the county no later than the Tuesday following the second Monday in April. The local town, village, or city may appeal the decision of the county board of supervisors to the state tax commission. The board of education of any school district in the county may also appeal the decision of the county board of supervisors to the state tax commission fort final decision. The state board of assessors is responsible for determining the assessed valuation of public utilities, although the actual work is performed by the staff of the state tax commission. All metallic mining property of the state is assessed by the state geologist. j The annual budget of school districts is required to be filed with the county tax allocation board of each county by the third Monday in April of each year. The county tax allocation board is required to establish the tax allocation for school districts, towns, villages, and cities on the basis of the needs of the taxing governmental agencies, although the combined allocation for all govern mental agencies cannot exceed $1.50 per $100 assessed valuation. 77 The school districts of the state are required to hold a public budget hearing prior to final adoption of the annual budget, but after its tax allocation has been fixed by the county tax allocation board. The tax alloca- tion is established by the county tax allocation board no later than the first Monday in June. A notice of the pub lic budget hearing must be published in a newspaper of general circulation at least six days prior to the hearing. The fiscal year for all school districts in the state begins July 1 and ends June 30. It was stated that legislation enacted in 1963 made it mandatory that school districts hold public budget hearings. Prior to the legislation passed in 1963, public J budget hearings were not required. It was related that a major problem faced by almost all school districts was that of operating from July 1 until January 2 0 before receipt of tax revenue. A bill is being drafted that would provide for collection of tax revenue by school districts during the summer months. It was further indicated that it would be desirable to have all governmental agencies on a July 1 to June 30 fiscal year. Minnesota The assessed valuation of real property is deter mined by the county assessor with the assistance and advice of the elected city, village, and township assessors in the counties in which the county commissioners have appointed a county assessor. In the remaining counties of the state, the assessed valuation of real property is determined by the elected city, village, or township assessors with ' assistance and guidance provided by the county supervisor of assessments. Legislation enacted in 1947 requires that the county commissioners in each of the eighty-seven counties of the state appoint either a county assessor or a county supervisor of assessments. The county assessor j and county supervisor of assessments of each county are appointed for four-year terms, subject to approval by the state commissioner of taxation. The assessed values of electrical property, pipe lines, and commercial airline property are determined on a statewide basis by the state tax commissioner. All other public utility property valuations and iron ore valuations are determined by the local assessor. A local board of review in each city, village, or 79 township is responsible for reviewing assessments and hear ing taxpayer appeals related to assessed valuation. The county commissioners of each county act as a county board of equalization and are responsible for reviewing all assessments of their respective counties. The school board of each school district in the state is required to levy on the assessed valuation estab lished by the assessor a tax sufficient to raise the revenue to support the adopted budget for the fiscal year. The tax is required to be certified to the state department of taxation on or before October 10. The school districts are not required by legal provisions to follow a budget calendar in constructing j their annual budgets. The annual budget of each school district must be prepared before October 10 in order to determine the tax levy necessary to support the budget. The annual budget is not required by statute to be prepared by October 10, but the tax necessary to support the budget must be certified to the state department of taxation no later than this date. The state department of education requires the annual school district budgets to be submitted by districts maintaining graded elementary and secondary 80 schools no later than November 30 for the current fiscal year. There are six school districts in the state that are known as special districts and are not required to file their budgets with the state department of education. There are no legal provisions that require the posting, publishing, or public hearing of the annual school budget prior to adoption. The state department of education does not have authority to revise school district budgets but functions in an advisory capacity in reviewing the budgets. The fiscal year for school districts in the state, exclusive of special districts, begins July 1 and ends j June 30. The fiscal year for special districts varies throughout the state. Mississippi The assessed valuation of real property is deter mined primarily by the county assessor in each of the eighty-two counties of the state. The county assessor is an elected official who serves a four-year term. The municipalities have city assessors who may use the assessed values of the city as determined by the county assessor, 81 or they may establish their own city assessed values. The assessed valuation of public utilities is determined on a statewide basis by the state tax commission. i The state tax commission has authority to equalize assessed values among counties of the state but is not vested with the authority to change assessments as determined by the county or municipal assessor. The commission is also responsible for general supervision of local assessing throughout the state. The county board of supervisors of each county acts as a county board of equalization with authority to equalize county assessments and to adjust local assessments 1 on appeal from the taxpayer. The governing body of the j municipalities is responsible for equalizing city assess ments and hearing taxpayer appeals related to property assessment. The county and city assessment rolls are completed and certified to the state tax commission during the month of August of each year. The board of education of all school districts exclusive of municipal school districts is required to adopt the annual budget and file a copy of the budget with 82 the county superintendent of education no later than July 5 of each year. The county superintendent of education is required to review the school district budgets and file two copies of the budgets with the state superintendent of education on or before July 15. Municipal school districts are required to file two copies of the annual budget with the state superintendent of education on or before July 15. There are no statutes that require review of the annual budget of municipal school districts by the county superin tendent of education. Although there are no legal provisions that require the posting, publishing, or public hearing of the budget prior to adoption by the governing board, the expenditures ! i for each budget category are required to be published or posted monthly by school districts. The state department of education is responsible for reviewing the annual school district budgets to deter mine compliance with the law and correctness but has no authority to revise or alter the budgets. The fiscal year for school districts begins July 1 and ends June 30, which is the same as the state fiscal year. 83 It was indicated that although the assessment calendar dates do not correspond to the school budget calendar dates, no problems are evident. it was further related that in municipal school districts it is required by law that the governing body of the city levy the tax requested by the board of education. Missouri Assessed valuations of property are determined in ninety-one of the 115 counties of the state by the county assessor who is an elected official- In the remaining twenty-four counties the elected township clerk, serving t as the ex officio assessor, is responsible for establish ing the assessed valuations of property located within his respective township. The state tax commission is responsible for the assessment of public utility property and supervision of local assessment throughout the state. Assessed values of property are reviewed by county boards of equalization who have the authority to adjust assessments on the basis of taxpayer appeal. The review of assessments is usually completed by the boards of equalization on or about July 1. The assessment roll is 84 certified to the state tax commission after this date for review and statewide equalization, which results in adjust ments of “ assessed values after July 1. In 1955, legislation was enacted requiring the tax rate to be reduced when the assessed valuation within a county was increased by 10 per cent or more over the prior year's assessed valuation. The rate was required to be reduced so as to produce the same amount of revenue as was produced by the prior year tax rate and assessed valuation. School districts are allowed to use a tax rate sufficient to realize the same amount of revenue received the previ ous fiscal year plus an amount sufficient to offset any reduction in school aid, resulting from the increase in assessed valuation. The annual budgets of school districts are required to be adopted by the board of education on or before July 1. If the board of education fails to adopt the annual budget by this date, the budget of the previous fiscal year becomes the official budget for the current fiscal year. The required tax rate for the ensuing fiscal year is presented to the voters of each school district during the early part of April of the current fiscal year. 85 There are no legal provisions that require the posting, publishing, or public hearing of the budget prior to adoption by the governing board. The annual budget becomes an official document after adoption by the governing board and is not subject to review by any agency of the state. The fiscal year of school districts in the state is July 1 to June 30. It was indicated that school district budget planning is a problem in that final assessed valuation figures are not available until after the adoption of the annual budget. Montana The assessed values of real property are estab lished by the county assessor in each of the fifty-six counties of the state. The county assessor is an elected official who serves a four-year term. The state board of equalization is responsible for the determination of assessed values of public utilities and the net proceeds of mines on a statewide basis. The board is also responsible for supervising local assessing and equalizing assessments throughout the state. 86 The county commissioners of each county act as a county board of equalization with authority to adjust assessments on the basis of taxpayer appeal and to equalize assessments throughout the county. The county assessor of each county is required to submit a certified copy of the assessed valuation of all taxable property in each school district and each city and ^ town to the county superintendent no later than the second Monday in July. The state superintendent of public instruction must transmit official estimates of state revenue to be distributed to the school districts for the ensuing fiscal year to the county superintendent of schools of each countyj on or before July 1. The county superintendent of schools is required to prepare a final estimate of revenue for each school district immediately after July 1. The county superintendent is required to transmit to each school district a preliminary estimate of revenue for the ensuing fiscal year along with the required budget forms on or before April 10 of the current fiscal year. The county superintendent is required to publish a notice in the official newspaper of the county prior to the meet 87 ing of the board of trustees of each school district at which the preliminary budget is adopted. The board of trustees is required to adopt the preliminary budget for the ensuing fiscal year on the fourth Monday in June. The adopted preliminary budget is filed with the county super intendent no later than July 1. The county board of commissioners of each county acting as a county board of budget supervisors is required to approve and adopt all preliminary school district budg ets on the fourth Monday in July. The county superintend ent of schools must publish a notice in the official news paper of the county between July 10 and July 20 indicating that preliminary school district budgets have been filed and that the county board of budget supervisors will meet to review and adopt the budgets on the fourth Monday in July. The county superintendent of schools must transmit a copy of the adopted budget of each school district in the county to the state superintendent of public instruction no later than September 1. The state superintendent re views the budgets to determine if they conform to state law. The fiscal year for school districts is July 1 to June 30. It was indicated that the existing relationship among the fiscal year, school budget calendar, and assess ment calendar is satisfactory. Nebraska Assessed values of real property are established by the elected county assessor in the majority of the ninety-three counties of the state. The county assessor serves a four-year term. Legislation enacted in 1947 provides that in coun ties of less than 6,500 population the electorate of the county may vote to abolish the office of the county assessor. In such cases, the duties of the assessor are combined with some other office, such as the clerk of district court, county clerk, or registrar of deeds. The state board of equalization is responsible for determining the assessed valuation of public utility property and for equalizing assessments throughout the state. The individual taxpayer may appeal to the county board of equalization regarding the assessed value of his property and if he disagrees may appeal to the district court, which renders the final decision. Assessed values as established by the assessor on January 1 are reviewed by the county board of equalization in June. The county board also hears taxpayer appeals in June. The school districts of the state are grouped into six classifications. School districts maintaining only elementary grades are designated class I. Districts that operate elementary and secondary grades and have a popula tion less than 1,000 are designated class IISchool districts maintaining elementary and secondary grades with a population between 1,000 and 50,000 are designated class III. Districts that operate elementary and secondary grades and have a population of 50,000 to 200,000 are known as class IV. School districts that maintain elemen tary and secondary grades and have a population of 2 00,000 or more are designated class V. Class VI school districts are those that maintain only secondary grades. All school districts, exclusive of class IV and V districts, are required to submit copies of their annual school budgets for the ensuing fiscal year to the county 90 superintendent of schools and to the county clerk on or before July 15. The governing board of a class IV school district must report the amount of required tax revenue to support the budget for the ensuing fiscal year to the county board on or before August 15. The board of educa tion of a class V district is required to determine and report to the county board the tax levy in mills necessary for the ensuing fiscal year. The county board is required to levy the tax necessary to raise the amount of revenue requested and certified by the governing board. The county board of supervisors or commissioners has no regulatory or review authority over the amount of tax revenue to be raised in each school district. There are no legal provisions that require the posting, publishing, or public hearing of the budget prior to approval by the board of education. The fiscal year for school districts in the state, with the exception of Omaha, begins July 1 and ends June 30. The fiscal year of the Omaha school district is September 1 to August 31. It was indicated that the assessment calendar and 91 budget calendar are difficult to integrate because tax revenue based on assessed values of property and the established tax rate is not realized in its entirety until ! twenty months after the assessment date. It was further related that the anticipated tax revenue for a fiscal year is derived from the previous tax levy and the current tax levy. It was stated that approximately 70 per cent of the revenue for a fiscal year is realized from the current tax levy and approximately 30 per cent from the levy of the previous year. It was related that this situation has caused school districts to maintain large cash reserves in order to assure adequate revenue to support the budget for the fiscal year. j i Nevada The assessed valuation of property is determined by the elected county assessor in each of the seventeen counties of the state. The state tax commission is responsible for estab lishing the assessed value of public utilities, bank stock, motor vehicles, and the net proceeds of mines. The county assessor of each county is required to complete the assessment roll and file a certified copy with 92 . the county auditor by December 31. The county auditor must submit the completed assessment roll to the county board of equalization for review. : The county board of equalization of each county is comprised of the county commissioners, a member of the board of trustees of the county school district, and a member representing each city in the county or, if no cities in the county, one member representing incorporated towns of the county. The county board of equalization is responsible for hearing taxpayer appeals regarding assessed values of property and for equalizing assessments through- : out the county. Statute requires that the county board hear all taxpayer appeals and equalize assessments within j the county no later than January 31. The taxpayer may also appeal to the state board of equalization if he is not satisfied with the decision of the county board of equalization. The taxpayer may further appeal for a final decision to the courts but only after appeal to the county and state board of equalization. The state board of equalization is required by law to hear all requested taxpayer appeals, equalize assess ments throughout the state, and certify the final assess- 93 ment roll to each county auditor and the state tax commis sion no later than the third Monday in February. The governing board of each county school district is required by statute to prepare the annual budget for the next succeeding fiscal year no later than March 15 of the current fiscal year. The governing board is required to hold a public budget hearing of the tentative budget prior to final adoption. A notice of the time and place of the hearing and a statement indicating that copies of the budget and supporting data are available for inspection and on file with the clerk of the governing board are required to be published in a newspaper within the school district ten days prior to the hearing. A copy of the tentative budget must be sent to the state tax commission ten days prior to the hearing for determination as to compliance with state law. A written certification of compliance or noncompliance is submitted to the governing board by the commission prior to the public hearing. if the budget fails to comply with the law, the certification of noncompliance must be read at the public hearing. The adopted annual budget is required to be certified and filed with the state tax commission no later 94 than April 1. The adopted budget is also filed with the county auditor, state deputy superintendent of schools, state superintendent of schools, state tax commission, and the legislative auditor. The state tax commission can alter the budget only in cases where the tax levy must be reduced in order to come within the combined $5.00 tax rate limitation for all governmental agencies of the state. The fiscal year for school districts begins July 1 and ends June 30. It was indicated that the relationship among the fiscal year, school budget calendar, and assessment calen dar is similar to that of California prior to 1955. It was 1 further stated that many fiscal scheduling problems were j resolved by legislation enacted in 1955 and 1965. New Hampshire Assessed values of property are determined by the board of selectmen in the towns of the state and by city assessors in the cities. The state tax commission is responsible for establishing the assessed valuation of public utility property throughout the state and for supervising local assessment of property in each of the ten counties of the 95 state. The commission is also required to prepare^equal- ized statewide valuations of property biennially. The equalized assessed valuation of a town or city is the result of adding to or subtracting from the taxable valuation an amount which will bring the taxable valuation into line with the present market value of the property in the community. The amount to be added to or subtracted from the taxable valuation is determined by the state tax commission every odd-numbered year, on the basis of data from the preceding year. This amount is intended to com pensate for the fact that similar properties are appraised locally at much higher or lower levels in some communities than in other communities. There are no legal provisions that authorize any county board or group of county officials to equalize assessments or to adjust assessed values on appeal from the taxpayer. The board of education of a supervisory union school district is required to adopt the annual budget at a meeting held before January 1 of each year. The board of education of a cooperative school district is required to prepare a preliminary budget for the ensuing fiscal year no later than thirty days prior to the annual meeting at which the final budget is adopted. A public hearing of the preliminary budget is required prior to the final adoption of the budget by the governing board. A notice of the public budget hearing is required to be posted seven days prior to the hearing. The annual meeting of the governing board of cooperative school dis tricts must be held between March 1 and April 20 of each year. The remaining school districts of the state, exclusive of nine city school districts, are required to I adopt the annual budget at the annual school district meeting of the board of education which must be held be- j tween March 1 and April 20. The nine city school districts are required to adopt an annual budget each year and sub mit a copy to the city council for approval. The required date of submittal of the annual budget is set by the city charter and varies with each city. There are approximately sixty-four school districts in the state that have elected to operate under a permis sive municipal budget law. in the districts operating under the municipal budget law the annual school district 97 budget is developed by a committee comprised of three, six, nine, or twelve members representing the town or village and the school district. The annual school district budget is adopted at the annual meeting held between March 1 and April 20 and the budget is required to be printed in the town report or published in a newspaper circulated in the town a minimum of one week prior to the annual meeting. School boards of school districts not operating under the provisions of the municipal budget law are required to print the annual budget in the town report or publish the budget in a separate school district report. School districts that have adopted the provisions of the municipal budget law are required to file a certi- j i fied copy of the adopted annual budget with the state tax commission. The annual budgets of all school districts are required to be filed with the state department of education immediately after adoption. The state tax commission and the state department of education review the budgets to determine compliance with the law but have no authority to alter the budgets. The fiscal year for all school districts, exclusive of nine city school districts, begins July 1 and ends 98 June 30. The fiscal year for the nine city school dis tricts is established by each city charter. New Jersey The assessed valuation of real property is estab lished in the 568 assessment districts of the state com prised of cities, boroughs, towns, and townships by an assessor in approximately 385 of the governmental units and by a board of assessors, typically consisting of three members, in the remainder of governmental units. The assessors serve a term of four years and the majority are appointed, rather than elected, officials. The state engineering and railroad tax bureau is j responsible for determining the assessed values of railroad property throughout the state and must certify the assessed values to the state division of budget and accounting that is responsible for tax collection. The taxes that are levied on public utility companies throughout the state are determined by the state public utility tax bureau. A county board of taxation exists in each of the twenty-one counties of the state with responsibility for equalizing assessments of the county and hearing taxpayer appeals related to assessment of property. The state 99 division of tax appeals is required to review the decisions: of the county boards of taxation related to taxpayer appeals and the assessments established by state agencies. ; The assessor or board of assessors of each govern mental unit determines the assessed valuation of property as of October 1 of each year for the ensuing fiscal year. The school districts of the state are categorized 1 into three types known as chapter VIII, chapter VII, and chapter VI school districts. The board of education of chapter VIII (regional) school districts is required to prepare and adopt a tenta tive budget on or before January 5. The annual budget advertisement statement, which includes a notice of the j public budget hearing, must be received by the county superintendent of schools of each county no later than seven days prior to the publishing of the advertisement in a newspaper circulated within the district. The budget and notice of hearing must be published no later than seven days prior to the public budget hearing that is required to be held between January 6 and January 22. The budget must be adopted by the governing board on or before January 22. The voters of the district must vote on the local 100 required tax to support the budget. The election is held on February 2. The board of education of chapter VII school dis tricts is required to prepare and adopt a tentative budget on or before January 12. The annual budget advertisement statement, which includes a notice of the public budget hearing, must be received by the county superintendent of schools of each county no later than seven days prior to the publishing of the advertisement in a newspaper circu lated in the district. The budget and notice of hearing must be published no later than seven days prior to the public budget hearing that is required to be held between January 13 and January 29. The budget must be adopted by | I the governing board on or before January 29. The voters of the district must vote on the local required tax to support the budget. The election is held on February 9. The board of education of chapter VI school dis tricts is required to prepare and adopt a tentative budget on or before February 1. The annual budget advertisement statement, which includes a notice of the public budget hearing, must be received by the county superintendent of 101 schools of each county no later than seven days prior to the publishing of the advertisement in a newspaper circu lated in the district. The budget and notice of hearing must be published no later than seven days prior to the public budget hearing that is required to be held between February 1 and February 15. In the chapter VI school dis tricts, which are predominantly cities, a board of school estimate is responsible for approving the annual budget. The annual budget of all school districts in the state is required to be filed with the state department of education for review as to compliance with the law. Stat ute does not require a specified date for filing the school district budget with the state department of education. | All school districts in the state operate on a fiscal year beginning July 1 and ending June 30 and munici palities and counties operate on a fiscal year of January 1 to December 31. It was indicated that the present relationship among the fiscal year, school budget calendar, and assess ment calendar results in the school districts of the state having final assessed valuation figures prior to adoption of the annual budget and the required date for the renewal 102 of teacher contracts. New Mexico Assessed values of real property are determined by the county assessor in each of the thirty-two counties of the state. The county assessor is an elected official who serves a two-year term. The state constitution allows the county assessor to serve two successive terms in office, but after two terms he is ineligible to hold any county office for a two-year period. The state tax commission is comprised of three appointed members and is responsible for establishing the assessed valuation of public utilities and corporate prop- , i erty, assisting county assessors and county boards of equalization and acting as a state board of equalization in equalizing assessments throughout the state. The oil and gas accounting commission is responsi ble for assessment of the oil and gas production on a statewide basis and must certify the assessed values prior to January. The county board of equalization of each county is responsible for county equalization of assessments and hearing the appeals of tajqpayers regarding property assessment. Assessed values are certified by the county assessor to the state tax commission prior to November of each year. The state tax commission certifies valuations to the public school finance division of the state depart ment of finance and administration who sets the tax rates for the school districts in July and August each year. The rates are computed on estimated assessed valuations due to the fact that final assessed values are not certi fied until November. The tax rates, as established by the public school finance division, are required to be certi fied to the county commissioners of each county before the first Monday in September of each year. The boards of education are required to submit the annual budget for the next succeeding fiscal year to the chief of the state public school finance division prior to April 15 of the current fiscal year. The chief of division is required to hold a budget hearing of the budget of each school district in the county, a schedule of the dates and locations of the hearings is required to be published by the chief of the division. The chief is assisted at the budget hearing by two budget commissioners appointed 104 by the county commissioners of each county prior to April 1. The budget commissioners are appointed one each from the two dominant political parties. The two budget commission ers and the chief of the public school finance division are authorized to fix the budget allowances of each school district. On or before July 1 of each year the public school finance division is required to approve and certify to the board of education of each school district an operating budget for use pending approval of the final budget which is certified on or before the first Monday in September. Before the first Monday in September the chief of the i division is required to issue certificates to the county commissioners of each county, informing them of the amount of tax levy necessary to meet the needs as reflected in the school budgets. There are no legal provisions that require the review or filing of the annual school budgets with any state agency other than the public school finance division of the state department of finance and administration. The fiscal year for all school districts and state agencies begins July and ends June 30. 105 It was indicated that a problem is created in ob taining final assessed valuation amounts due to the fact that the assessment calendar of county assessors and the assessment calendar of the oil and gas accounting commis sion do not coincide. New York Assessed values of property are determined by a board of assessors in each town or city of the state. The method of selecting the board of assessors varies in the cities and towns and is accomplished by election or appointment. The state board of equalization and assessment is responsible for establishing special franchise assessments, determining annual statewide equalization rates, assisting local town and city assessors, reviewing and approving assessed values of taxable lands owned by the state, and determining the assessed value ceilings for the property owned by railroads. There are no statutes of the state that establish or require a county or state system of review and hearing of taxpayer appeals related to the assessed valuation of property. Legislation enacted in 1961 provides for tax- 106 payer appeal hearings by a local town or city board of review. The board of review is comprised of the board of assessors in the majority of towns and cities. The remain der of the towns and cities have either ex officio boards or separate review boards serving as local boards of review. The board of review is required to hear taxpayer appeals on the third Tuesday in June. The taxpayer may appeal further to the supreme court for final decision if he does not agree with the decision of the board of review. The board of assessors of each city and town is required to determine the assessed valuation of all real property between January 1 and June 1 of each year. Notices of assessed values are mailed to all property owners, whose valuation has increased, between June 1 and June 5. The final assessment roll must be certified annually to each school district by the board of assessors on or before August 1. Each school district in the state, exclusive of six school districts that are in cities of over 125,000 population, is fiscally independent and determines budge tary needs. The remaining city school districts are required to submit their annual budgets to the municipal officers for review and approval. All common school districts in the state are required to hold an annual meeting and adopt the annual budget for the ensuing fiscal year on the first Tuesday in May. In all union free and central school districts, with ; the exception of the schools in one county where the law requires the annual meeting to be held on the first Tuesday in May, the voters may decide to hold the annual meeting to adopt the budget on either the first Tuesday in May, the third Tuesday in June or the second Tuesday in July. In the fifty-six independent city school districts of the state, the annual budget for the ensuing fiscal year| is required to be adopted by the board of education prior to June 30 of the current fiscal year. In school districts which are required to adopt the budget at an annual meeting, a notice of the meeting along with information as to the availability seven days prior to the meeting of copies of the budget in all schools of the district must be published prior to the meeting. There are no legal provisions that require the filing or review of the annual school budgets by any agency of the state. Copies of the annual budget are requested 108 by the state education department, but it is not mandatory that school districts comply. The fiscal year for all school districts of the state begins July 1 and ends June 30. The fiscal year of the state is April 1 to March 31. It was indicated that three of the large city school districts face the problem of having to account to the state for one fiscal year period and to the city on a different fiscal year period. It was further related that although legislation enacted in 1963 requires the assessment roll to be certi fied to the school districts on or before August 1 by the board of assessors, many do not meet this deadline and school districts are powerless to force the board of assessors to comply with the deadline date. North Carolina The assessed values of real property are estab lished by the county tax supervisor in each of the 100 counties of the state. The tax supervisor is appointed by the county commissioners and serves a two-year term. The state board of assessment is responsible for determining the assessed valuation of public utility 109 property throughout the state and has broad legal authority to supervise local assessment. The state board of assessment is required by statute to review and, where justified, revise local property assessments upon appeal from the local taxpayer. Legislation enacted in 1959 requires that the 100 counties of the state be divided into eight groups, and each year one of the groups must revalue all property. The method of revaluation is discretionary with the county commissioners. In the majority of cases the practice is to employ an independent professional appraisal and valua tion firm to complete the revaluation of property. There are 100 county school districts and seventy- ! I one city school districts in the state. The county and city school districts are required to adopt the annual budget and file a copy of the budget with the appropriate tax levying authorities (county commissioners or city council) on or before June 15. The tax levying authorities are required to approve the requests for funds to support the annual school budget and notify the boards of education of their action on or before July 10. In the event of disagreement as to the requested 110 amount of funds to support the annual school budget, a joint meeting of the board of education and the board of the tax levying authority is required to be held. If agreement cannot be reached, each member of the respective boards shall have one vote on the question of the requested funds for the budget. In the event of a tie vote, the clerk of the superior court is required to act as arbi trator and render a decision within five days. The board of education and the tax levying authority have the right to appeal the decision of the clerk to the superior court but must do so within ten days after the decision of the clerk has been rendered. The adopted annual budget of each school district j in the state is required by statute to be filed with state board of education and the state superintendent of public instruction on or before the first day of October of the current fiscal year. The department has no authority to alter the budgets, but reviews the budgets to determine whether or not the correct allotment of state funds is included in accordance with the law. There are no legal provisions that require the posting, publishing, or public hearing of the budget prior Ill to adoption by the board of education. The fiscal year for all school districts and other governmental agencies in the state begins July 1 and ends June 30. It was indicated that the present relationship among the fiscal year, school budget calendar, and assess ment calendar is not satisfactory. It was further stated that it would be desirable to revise the existing budget calendar. It was stated that a revised budget calendar would make the budgeting process more effective and expedi tious by requiring that adopted budgets be submitted to the tax levying authorities by the board of education no ' later than May 1 of each year and that final approval of j the annual school district budgets be accomplished by the tax levying authorities no later than June 1 of the current fiscal year. North Dakota Assessed values of real property are determined by the local city, township, village, and district assessor of each of the respective governmental agencies. The mayor or city commission appoints the city assessor who serves full-time in the larger cities and part-time in the smaller 112 cities. The majority of township, village, and district assessors are elected annually, but in some cases they are elected biennially. The township, village, and district assessors serve on a part-time basis. The state board of equalization is responsible for determining the assessed valuation of public utilities throughout the state and for the equalization of assess ments on a statewide basis. The governing bodies of cities, townships, and villages acting as review boards are required to review assessed values and to hear taxpayers appeals related to the assessed valuation of property. The local review boards must submit the assessment roll to the county audi- [ i tor for review as to inclusion of all property and for auditing for possible errors. The county commissioners in each of the fifty-three counties of the state sit as a board of equalization each year with responsibility for equaliz ing the assessment roll of the county and for adjusting taxpayer assessments on the basis of appeal and hearing. Legislation enacted in 1963 authorized the county board of equalization of each county to raise or lower an individual taxpayer's assessed valuation. 113 The board of education of each school district in the state is required to prepare and adopt the annual school budget for the fiscal year at the annual meeting that must be held on the second Tuesday in July. School districts located within the boundaries of an incorporated village or city are required to file the annual budget with a board of budget review. The board of budget review has the legal authority to alter the budgets of the school districts. After review by the board of review, a copy of the budget must be filed with the county superintendent who is required to file a certi fied copy with the county auditor no later than the last day of July. The county auditor is required to make the certified levy reflected in the annual school budgets as permitted by the law. There are no statutes that require the posting, publishing, or public hearing of the budget prior to adoption by the board of education. The majority of all school districts in the state are not required to file the annual budget with the state department of public instruction. Only those school dis tricts that participate in the emergency portion of the 114 state equalization fund are required to file a copy of the annual budget with the state department of public instruc tion. The fiscal year for school districts, as well as state government, begins July 1 and ends June 30. It was indicated that the relationship between the fiscal year, school budget calendar, and assessment calen dar is satisfactory. Ohio Assessed values of property are determined by the county auditor in each of the eighty-eight counties of the state. The county auditor is an elected official. The state department of taxation is responsible for establishing the assessed valuation of public utility property throughout the state. The county auditor of each county acts as an agent of the state tax commission in determining the assessed values of personal property. The state board of tax appeals is responsible for supervising the assessment of real property accomplished by the county auditor of each county. A county board of revision exists in each county with responsibility for hearing taxpayer appeals and com plaints related to assessed values of property. The county board of revision has the legal authority to revise assess ments. The taxpayer can further appeal to the state board of tax appeals if he disagrees with the decision of the county board of revision. The county auditor is required to compile the assessment roll of real and personal property on or before the first Monday in August. The county auditor is required to file a certified copy of the assessment roll, after making necessary corrections, with the county treasurer on j the first day of October. The board of education of each local school dis trict is required to adopt a tax budget for the next succeeding fiscal year on or before July 15 of the current fiscal year. The adopted budget is required to be sub mitted to the county auditor on or before July 20. The county auditor must submit the budget to the budget com mission of each county for approval. The county budget commission has the authority to adjust the budget but is required to allow representatives of the school district to appear before the commission to explain the financial 116 needs of the district. The commission is required to take final action on all school district budgets before Septem ber 1. A certified copy of the approved budget must be filed with the school district and the county auditor by the commission after September 1. The board of education is required to authorize the necessary tax levy and certify the levy to the county auditor on or before October 1. The board of education must revise the tax budget on or before December 21 so that, the total estimated expenditures from any fund will not exceed the total appropriations that may be made from each fund. The clerk of each school district must certify to the county auditor the total funds available from all sources for expenditure together with the previous year balances by January 1. The governing board is required to adopt the final budget for the ensuing fiscal year, based on the revised tax estimate as submitted by the county budget commission, on or before January 1. If the govern ing board has not received a revised tax estimate from the budget commission prior to January 1, it may postpone adop tion of the final budget until not later than April 1. 117 Statute requires that two copies of the annual budget be filed in the office of the clerk of the school district for public inspection at least ten days before adoption by the board of education. The law also provides for a public budget hearing prior to adoption by the govern ing board. A notice of the hearing must be published in a newspaper of general circulation in the district a minimum of ten days before the hearing. There are no legal provisions that make it manda tory that the annual school budgets be submitted to any state agency for review or approval. The fiscal year for all school districts in the state begins January 1 and ends December 31. j It was indicated that the relationship among the fiscal year, school budget calendar, and assessment calendar is satisfactory. Oklahoma The assessed values of property are determined by the county assessor in each of the seventy-seven counties of the state. The county assessor is an elected official who serves a two-year term of office. The state board of equalization is responsible for 118 establishing the assessed valuation of public utility and railroad property throughout the state, in actual practice, the ad valorem tax division of the state tax commission determines the assessed values and reports them to the state board of equalization. The county board of equalization of each county is responsible for equalizing the assessments of the county. The taxpayer can appeal the equalized assessed values of his property to the district court and has the right to appeal further to the supreme court. Appeals related to the assessed values as equalized by the state board of equalization are made directly to the supreme I court. | t The county assessor must certify the assessment roll on or before April 1 of each year. Each school district in the state is required to adopt the annual budget for the next succeeding fiscal year and file a copy of the budget with the county excise board each year before the end of July. The county excise board must approve the annual school budgets before the end of August. The authority of the county excise board is limited to review of the budgets to determine whether or not the 119 estimated budget income is sufficient to support the esti mated budget expenditures. The board has no discretionary authority related to the approval of tax levies or appro- ! priations. The county excise board must file a copy of the approved budgets with the state auditor after it has given final approval. The state auditor does not have the authority to revise the school district budgets, but the copies of the budgets on file in his office become public records and may be reviewed by any taxpayer. The annual school budget of each school district is required to be published prior to a forty-day protest period. During the protest period any taxpayer residing in I the school district may protest the tax rate or the amount i i of the budget appropriation. The state court of tax review is responsible for rendering a decision on all taxpayer protests related to the annual school budgets. State law allows the county excise board to approve up to 25 per cent of the budget for immediate expenditure prior to the close of the forty-day protest period. The fiscal year for all school districts of the state is July 1 to June 30. It was indicated that the present relationship among 120 the fiscal year, school budget calendar, and assessment calendar is satisfactory. It was further stated that very few budget protests are filed by taxpayers during the forty-day protest period established by statute. Oregon Assessed values of property are established by an elected county assessor in each of the thirty-six counties of the state. The county assessor serves a four-year term of office. The assessed valuations of public utility property are determined by the valuation division of the state tax commission. The state tax commission has broad legal authority to supervise the local assessment of property and has the power to equalize assessments among and within the counties of the state. The county board of equalization of each county is required by statute to equalize the county assessment roll and to review and hear taxpayer appeals regarding the established assessed values of property. The board meets annually beginning in May for a three to five week period to review and hear taxpayer appeals. The taxpayer may appeal the decision of the county board of equalization to 121 the state tax commission. Legislation enacted in 1961 resulted in the creation of a tax court with a small claims division responsible for hearing appeals from small tax payers. The tax courts hear appeals from large taxpayers and appeals related to assessments determined by the state tax commission. The decision of the tax courts related to the state tax commission assessments may be appealed to the supreme court. The completed assessment roll is certified to the county board of equalization by the county assessor in April. The county board of equalization is required to certify the equalized assessment roll no later than the first week in June. All school districts must certify the j required tax levy to the county assessor on July 15. The assessor is required to file a copy of the equalized assessment roll on or before October 15. The annual school budgets for the ensuing fiscal year are required by statute to be adopted by the board of education on or before June 30. Legislation enacted in 1963 extended the required budget adoption deadline ten days to the present date of June 30 to allow for an additional public budget hearing. The preparation of the annual budget is the respon sibility of a budget committee comprised of the board of education and a corresponding number of electors and free holders appointed by the board. The budget committee is required by law to hold two public hearings prior to final adoption of the budget. A notice of the first hearing and a budget summary is required to be published by statute but the state tax commission suggests that the notice of the second hearing, which is required to be held ten days after the first hearing, be published also. The notice is required to be published in a newspaper of general circula tion in the school district no later than eight days prior to the first public budget hearing. All school districts in Multnomah County, which includes Portland, are required to follow the same laws related to the preparation and adoption of the budget with the exception that the budget hearings are conducted in Portland by the tax supervising and conservation commission and the remaining school districts in the county have the option of having the commission conduct the hearing or of conducting their own hearings. The annual school district budgets are not subject 12 3 to review or revision by any state agency. The fiscal year for all school districts begins July 1 and ends June 30. It was indicated that the relationship among the fiscal year, school budget calendar, and assessment calen dar is generally satisfactory. It was further related that a problem exists in that teachers* contracts are required to be signed prior to the final determination of various facets of the annual budget including final adoption. Pennsylvania The assessed values of all real property are deter mined by the chief assessor in each of sixty-seven counties of the state. The chief assessor is appointed by the county commissioners of each county. The county commission ers act as a board of assessment. Legislation enacted in 1951 created the position of chief assessor for each county. Prior to 1951 assessment was the responsibility of elected borough and township assessors. The function of the boroughs and township assessors under the present law is to furnish assessment data to the chief assessor. The county commissioners are responsible for 124 equalizing the assessments within their respective counties. The state tax equalization board is responsible for determining the total assessed valuation of taxable property* in each of the school districts in the state. The assessed values are certified to the state department of public instruction annually for use in the distribution of state financial support to school districts. There are no legal provisions that establish a state agency with authority to equalize assessments or determine assessment ratios throughout the state. In the majority of instances the assessors submit ( the annual assessment roll to the county courthouse during September of each year. This roll is used to update the assessment roll of the county. A certified statement of the assessment roll is submitted to each school district in February. The tax list is prepared and submitted to the school districts in April or May. All school districts of the state, exclusive of Philadelphia, Pittsburgh, Scranton, and Brie, adopt the annual budget during the months of February to June. The annual school district budgets are required to be adopted no later than June 30. The adopted budgets are required to 125 be adopted no later than June 30. The adopted budgets are required to be submitted to the county board of school directors for review. There are no legal provisions that require the posting, publishing, or public hearing of the budget prior to adoption by the governing board of the school district. The school districts are required to file a copy of the budget with the state department of public instruction for informational purposes no later than fifteen days after adoption. There are no legal requirements that mandate the review or approval of the annual school budgets by any agency of the state. The fiscal year for school districts, exclusive of Philadelphia, Pittsburgh, Scranton, and Erie, begins July 1 and ends June 30. Legislation enacted in 1963 changed the beginning of the fiscal year for school districts from the first Monday in July to July 1. The school districts of Philadelphia, Pittsburgh, Scranton, and Erie operate on a fiscal year of January 1 to December 31. The fiscal year for state government is July 1 to June 30. It was indicated that the existing relationship 126 among the fiscal year, school budget calendar, and assess ment calendar is satisfactory. It was stated that a problem is created in many school districts due to the fact that in numerous instances the county officials fail to provide the tax duplicate prior to July 1. It was further related that legislation is being considered that would require the four districts presently on a calendar year fiscal period to conform to the July 1 to June 30 fiscal year. Rhode Island Assessed values of all real property, including ' railroad and public utilities, are determined by a board of , assessors in the majority of the eight cities and thirty- one towns of the state, in some cases the assessed values are determined by a single city or town assessor. The assessors are elected officials and serve on a full-time or part-time basis for a one- or two-year term of office. Assessed values of property are certified by the assessors as of December 31 of each year. The state board of tax equalization was created by legislation enacted in 1956. The board is responsible for determining the total equalized assessed valuation of each of the towns and cities and must certify the amount to the state commissioner of education for use in distributing state financial support to the school districts of the state. There are no legal provisions that authorize any agency of the county or state to equalize assessments or to review and hear taxpayer appeals related to assessment of property. There are no state laws that establish a budget calendar, although the governing board of each school dis trict is required by local statute to adopt the annual budget for the ensuing fiscal year thirty days prior to the annual town meeting or, in the case of cities, prior to the beginning of the fiscal year of the city. The annual school district budgets are subject to review and approval by the governing body of the town or city. The budgets are approved at an annual meeting of the governing body of the town or city. The date of the annual meeting varies throughout the state. Each town is required to vote on all budget appro priations for the school district located within its boundaries. The towns must levy an amount that represents 128 1 no less than the average amount raised by taxes and expend ed by the town for public schools during the previous three- year period. The cities are allowed to establish a tax rate of $2.50 for all operational purposes, which includes school district and municipal government. The cities can exceed the tax rate for a one-year period only by receiving authorization from the state legislature. The posting or publishing of the annual school dis trict budget prior to adoption by the governing board of the school district is not required by statute. The school district budgets are required to be filed with the state commissioner of education no later than thirty days prior to the annual town meeting. The budgets are reviewed to determine whether or not the tax revenue of each budget is equal to the average of the pre vious three-year period. The fiscal year for school districts varies through out the state. Approximately twenty-five of the thirty- nine cities and towns operate on a July 1 to June 30 fiscal year. The state fiscal year begins July 1 and ends June 30. It was indicated that those school districts on a 129 different fiscal year period from that of the state are faced with the problem of keeping two sets of accounting records in order to complete the annual reports required by the state department of education. It was further related that legislation requiring a uniform fiscal year of July 1 to June 30 throughout the state was proposed by the state board of education at the 1961 and 1963 legislative sessions but failed to be enacted. South Carolina The assessed values of real property are determined by the county auditor in each of the forty-six counties of the state with the assistance of local district and town ship assessors. The county auditor and the township and ! district assessor comprise a board known as a county board of assessors. The local district and township assessors are recommended to the governor by the county auditor for appointment to office. The state tax commission is responsible for estab lishing the assessed values of corporation and public utility property throughout the state. The county board of assessors is responsible for equalizing assessments within the county and must hear 130 taxpayer appeals related to property assessment. The tax payer may further appeal to the state tax commission. Every property owner in the state is required to certify to the county auditor the property he owns along with an estimate of the value of the property. Some of the counties in the state have developed a system of annual revaluation whereby improvements and sales are reported annually to the county board of assessors. In other coun ties revaluation is accomplished every four years. The assessed valuation of property is determined on the basis of property owned as of January 1. The legal provisions related to the required date for adoption of the annual budget for the ensuing fiscal year varies in the school districts throughout the state. The majority of school districts in the state are required to adopt the annual budget on or before various dates specified in the law that fall between April 1 and June 30. In many instances the state school laws require that the annual budget be reviewed and approved by the county board of education and the county legislative dele gation after approval by the board of education. in other cases, the law requires review and approval of the adopted 131 budgets by the county board of education only. There are no general provisions of the statutes that apply to all school districts in relation to a specified budget calendar. There are no legal provisions that require the posting, publishing, or public hearing of the budget prior to adoption by the governing board. The school districts are not required to file a copy of the annual budget with any agency of the state for review or approval. The fiscal year for all school districts as well as for the state government begins July 1 and ends June 30. It was indicated that the relationship among the fiscal year, school budget calendars, and the assessment calendar is satisfactory. It was further related that the standardization of assessment practices is a need that is very much in evidence throughout the state. South Dakota The assessed valuation of property is determined by the county director of equalization in each of the sixty- four counties of the state. The director of equalization is appointed by the county commissioners of each county for a one-year term of office. Local governmental agencies may 132 appoint their own assessors who serve subject to the recommendations of the county director of assessment. The state revenue department is responsible for determining the assessed values of railroad and public utility property and annual publication of a statewide sales ratio study conducted by the department. In the municipalities the governing body sits as a board of equalization with responsibility for the equaliza tion of assessments of property within the boundaries of the city and the hearing of taxpayer appeals related to the assessment of property. The county commissioners in each ! county act as a county board of equalization. The county j board is responsible for the equalization of assessments j and the hearing of taxpayer assessment appeals. Property is assessed according to ownership on January 1. The municipal and county boards of equalization meet annually in July. The school districts receive final assessed valuation figures in November but are required to certify the required tax levy necessary to support the annual budget to the county auditor on or before August 15. A specified date by which the board of education is required to adopt the annual budget for the ensuing fiscal 133 year is not prescribed by statute. The school districts are required to prepare and adopt the annual budget prior to August 15 in order to certify the necessary budget tax levy to the county auditor by the deadline date. The county auditors have the authority to reduce the requested levy only if it exceeds the maximum allowed by statute. The county superintendent of schools is required to review the annual budgets of the school districts to determine compliance with the law. There are no legal provisions that require the posting, publishing, or public hearing of the budget prior to adoption by the board of education. I I The annual budgets of school districts are not subject to review or approval by any state agency. The fiscal year for all of the school districts in the state begins July 1 and ends June 30. It was indicated that the relationship among the fiscal year, school budget calendar, and assessment calendar is not satisfactory. It was further stated that school districts enter into contracts with teachers annually in March for the next succeeding fiscal year. It was stated that this constitutes approximately 70 per cent of the budget committed for employees prior to the beginning of the school fiscal year and before the school board has any knowledge of the assessed valuation for the ensuing fiscal year. Tennessee The assessed values of property are determined primarily by the elected county assessor in each of the ninety-five counties of the state. The county assessor serves a four-year term of office. There are approximately 100 municipalities that are authorized by charter to deter mine the assessed valuation of property within their boundaries. The assessed valuation is determined throughout the state by the state public service commission subject to review and approval by the state board of equalization. Legislation enacted in 1957 created the office of the executive secretary under the state board of equaliza tion. The state agency, under the direction of the executive secretary, is responsible for providing assist ance to local assessors in order to achieve standard and equitable statewide assessment procedures. The county board of equalization is responsible for 135 equalizing county assessments and for hearing taxpayer appeals related to the assessment of property. The assessed valuation of property is determined on the basis of property owned on January 10 each year. The county assessor is required to certify the assessment roll to the county clerk on or before the first Monday in May. The county clerk provides the assessment roll to the county board of equalization for review, equalization, and assess ment appeal hearings. The county board of equalization is required to equalize the roll and file a certified copy with the state board of equalization on or before the first Monday in August. The state board of equalization must certify the roll and return it to each county by October. Public utility assessed values are certified to each county by the state public service commission on the third Monday in October. The governing boards of county school districts are required to adopt the annual budget for the next succeeding fiscal year prior to the meeting of the county court in April. The school budgets are subject to revision by the county court. City and special district boards of education pre 136 pare and adopt the annual budget in June and submit the budget to the city council for approval in July. City school districts operate under the provisions of the city charter, and special school districts operate under special legislative statutes. The tax rate of special school dis tricts can be increased by legislative approval every odd year. This means that, although special school districts prepare their budgets annually, no increase in tax rate can be included on even years. Each county, city, and special school district is required to file a certified copy of the annual budget with the state commissioner of education within thirty days after 'the beginning of the fiscal year. ! There are no legal provisions that require the post ing, publishing, or public hearing of the annual budget prior to adoption by the board of education. The fiscal year for all school districts of the state begins July 1 and ends June 30. It was indicated that, although the annual budget must be prepared and adopted before final assessment figures are known, a fairly accurate estimate of the assessed values is available to school districts by April of each year. 137 It was further related that the present relation ship among the fiscal year, school budget calendar, and assessment calendar would be improved if all assessed valuation figures including public utility valuations were completed and certified by March 1 of each year. Texas The assessed values of property are determined by local assessors. A county assessor-collector is elected for a four-year term in each of the 254 counties of the state. Many of the local governmental units use the asses sed values established by the county assessor-collector, although a substantial number of cities, school districts, and special districts establish their own assessed values by use of an appointed assessor. The state tax board is responsible for determining the assessed valuation of intangible assets of specified transportation companies. All independent school districts are authorized by statute to appoint their own assessor-collector. In these school districts each property owner is required to submit a list of property owned and an estimate of value of the 138 property to the assessor-collector. If the property owner fails to submit a list, the assessor-collector has the right to determine the preliminary assessed values. The district board of education annually appoints a board of equaliza tion that is responsible for equalizing assessments of property within the district boundaries, sending notices to all property owners whose valuations have increased, and hearing taxpayer appeals related to property assessment. The common school districts of the state are re quired to use the assessed values as determined by the county assessor-collector and equalized by the county com missioners court. The county commissioners court in each county is j responsible for equalizing assessments as established by the county assessor-collector but has no authority to re vise assessed values as determined by the school district assessor-collector. The board of equalization or the county commission ers court is required to file its approved assessment roll with the governing board of the school districts no later than August 20. The governing board of each school district in the 139 state, exclusive of common school districts, is required to adopt the annual budget for the ensuing fiscal year no later than August 20. A public budget hearing is required to be held prior to the adoption of the annual budget. The annual budget of all common school districts is prepared by the county superintendent of schools on or before August 10 of each year. There are no legal provisions that require the posting or publishing of the budget prior to the public budget hearing and adoption of the budget by the governing board of the school district. The law does not require that the annual school district budgets be approved by any agency of the state. A copy of the annual budget of each school district is required to be filed with the state commissioner of educa tion for review as to compliance with the law no later than November 1. A copy must also be filed with the county clerk of the respective county. The fiscal year for all school districts as well as state government begins September 1 and ends August 31. It was indicated that the relationship among the fiscal year, school budget calendar, and assessment calendar is satisfactory. It was further related that in actual practice the majority of school districts begin preparation of the annual budget as early as April of the current fiscal year and have a preliminary budget adopted by the governing board prior to July 1. Utah Assessed values of property are determined by an elected county assessor in each of the twenty-nine counties of the state. The state tax commission is responsible for estab lishing the assessed valuation of mining property, power companies, and other public utilities throughout the state. Legislation enacted in 1953 requires that the state tax commission complete a revaluation of all property in the state on a five-year rotation basis. The commission also is responsible for conducting an annual two-day school for assessors as a result of legislation enacted in 1957. The county assessors are required by statute to attend the annual school unless excused. The county board of equalization of each county is required to equalize assessments within the county and has the power to increase or lower assessments on the basis of taxpayer appeal or review of pertinent facts related to the determination of the assessed values. The state tax com mission has the same authority as the county board of equalization. The county assessor is required to certify the completed assessment roll to the county treasurer on or before the first Monday in May of each year. The superintendent of each school district in the state is required by statute to prepare and file the annual budget for the next succeeding fiscal year with the board of education on or before June 1. The superintendent is required to indicate the financial condition of the budget as of May 1 of the current fiscal year and an estimate of the budget balances at the close of the fiscal year. The budget is then placed on file with the clerk of the board of education for public inspection for a minimum period of fifteen days prior to adoption by the governing board. The board of education is required to adopt the budget for the ensuing fiscal year on or before June 30. The governing board is required by statute to hold a public budget hearing prior to adoption and must publish a notice 142 of the public hearing at least ten days prior to the hearing in a newspaper of general circulation. A copy of the budget must be filed with the state department of public instruction and the state auditor after adoption by the board of education for review as to compli ance with the law. The fiscal year for all school districts in the state begins July 1 and ends June 30. The fiscal year for municipal and county government is January 1 to December 31. It was indicated that the relationship among the fiscal year, school budget calendar, and assessment calen dar is not satisfactory. It was stated that the adoption of the annual budget on the basis of estimated assessed values has resulted in financial problems for school dis tricts. It was further related that, although the assess ment rolls are certified on the first Monday in May, the official certified roll can be received as late as January and in some instances may have been reduced by the board of equaliz ation. It was stated that many fiscal problems would be resolved if all governmental agencies in the state were required to operate on the same fiscal year period. Vermont Assessed values of all real property are established by a board of listers (assessors) in each township of the state. The board is elected by the voters of the respective towns. The state commissioner of taxes has broad statutory responsibility which includes advising the board of listers regarding assessment procedures and duties, prescribing standard assessment forms, and summoning listers to assess ment schools. The taxpayer has the right to appeal to the state commissioner of taxes regarding the assessment of property. The statutes do not provide for a county or state j board of equalization with authority to equalize assess ments and adjust assessments on appeal from the taxpayer. The establishment of assessed values of real property in the majority of cases is completed each year by the board of listers on April 1. In most of the larger towns the roll is completed before April 1, but in many of the small rural towns the roll is completed during April. The assessment roll is certified to the town clerk at various dates between May and June, depending on the size 144 of the town. The school districts of the state have no statutory deadline dates related to the preparation, adoption, and filing of the annual budget for the ensuing fiscal year, except that it must be adopted in time to be printed in the annual town report. The majority of the local town school districts adopt the budget by a majority vote of the electorate at the annual meeting held on the first Tuesday after the first Monday in March. Incorporated school districts adopt the annual budget at the annual meeting that is held in most instances during the month of June. City school departments (districts) adopt the annual school budget in the majority of cases on the first Monday in March. The budget must be included in the report of the school district that is distributed prior to the annual meeting of the school district. There are no legal provisions that require the filing, review, or approval of the annual school district budgets by any agency of the county or the state. The fiscal year for school districts varies throughout the state. The most common fiscal year periods 145 for the school districts are January 1 to December 31; July 1 to June 30; and February 1 to January 31. Prior to 1951 the fiscal year for school districts was required by statute to be July 1 to June 30. It was indicated that the relationship among the fiscal year, school budget calendar, and assessment calen dar is not satisfactory. It was further stated that a problem is created by the fact that tax rates are set on the basis of an estimated assessed valuation that is most difficult to estimate accurately. Virginia The assessed values of real property are determined by a board of assessors in the counties and cities of the state with the exception that in some of the cities and counties the assessed values are determined by a board of real estate assessors. The boards of assessors, or the board of real estate assessors, are appointed by the governing body of the county or city. The assessed values of real property exclusive of real estate are determined by an elected county or city commissioner of revenue. The state corporation commission is responsible for determining the assessed values of public service corpora- tions throughout the state. The state department of taxation is responsible for supervising local assessment and conducting an annual study to determine the actual ratios of assessed values to the selling prices of real estate in the local governmental units of the state. The ratio study as completed by the state department of taxation is used in the distribution of state financial support to school districts. The board of education of each school district in the state is required to prepare and adopt the annual budget prior to the first day of April each year. The annual budgets are required to be submitted for approval to the county board of supervisors, or to the city council as the case may be, no later than the first day of April. The board of supervisors or the city council has the legal authority to revise the annual budgets and may reduce the budget and the requested tax levy at its discretion. There are no statutory provisions that require the public hearing of the budget prior to adoption by the governing board of the school district, but the law requires that the annual budget be posted or published prior to adoption. The county board of supervisors or the city 147 council is required to notify the taxpayers within their jurisdiction if an increase in the general property tax is contemplated. The annual budgets of the school districts are not subject to review or approval by any agency of the state. There are no statutory provisions that require the filing of the budget with any state agency. The fiscal year for all school districts begins July 1 and ends June 30. The fiscal year of July 1 to June 30 was made mandatory for city and town school dis tricts as a result of legislation enacted by the 1964 general assembly. i It was indicated that the legislation mandating a uniform fiscal year in the state was enacted for the purpose of facilitating the compilation of financial and statisti cal data. Washington Assessed values of property are determined by an elected county assessor in each of the thirty-nine counties of the state. The property tax division of the state tax commis sion is responsible for establishing the assessed values of 148 public utility property and the assessed values of private car companies. The public utility and private car company assessed values are apportioned by the state tax commission to the respective counties and taxing jurisdictions within the counties. The governing body of each county acts as a county board of equalization with responsibility for equalizing assessments within the county and among individual taxpayers of the county. The state tax commission has the legal authority to revise the assessed values of property within any county of the state, to equalize assessed values among the counties of the state, and to hear and render decisions on appeals from local taxpayers related to assessments as equalized by each county board of equalization. Preliminary analysis and research of taxpayer appeals presented to the state tax commission are conducted by staff members at the state assessment standards section who obtain material from the field for consideration of the commission. The county assessor of each county must certify the assessment roll for the current fiscal year by November 1. The board of education of each first-class school 149 district is required by statute to adopt the annual budget for the ensuing fiscal year and file a copy of the adopted budget with the county commissioners of the respective county no later than the first Friday in May. The county commissioners have no authority to adjust the adopted budgets submitted by the boards of education. The board of education of each second and third- class school district is required by statute to adopt the annual budget for the next succeeding fiscal year and sub mit a copy of the budget to the county budget review com mittee of each county for approval no later than the first day of August. The budget review committee has the authori ty to adjust the budget at its discretion. After review by the committee, a copy of the budget must be filed with the state superintendent of public instruction. A copy of the annual budget of first-class school districts is required to be filed with the state division of municipal corporations no later than the first Wednesday following the first Monday in October. There are no legal provisions that require the posting, publishing, or public hearing of the budget prior to its adoption by the board of education. 150 The fiscal year for the school districts in the state begins July 1 and ends June 30. It was indicated that the relationship among the fiscal year, school budget calendar, and assessment calen dar is not satisfactory. It was further related that the certification of the assessment roll at an earlier date would be desirable. West Virginia The assessed values of property are determined by an elected county assessor in each of the fifty-five counties of the state. The county assessor serves a four- year term of office. The assessed values of public utilities are deter mined by the state board of public works with the assist ance of a special division in the office of the state tax commissioner. A county board of equalization and review exists in each county of the state. The board is responsible for equalizing assessments within the respective county and has the legal authority to adjust assessments on the basis of taxpayer appeal. 151 The property evaluation department of the state tax commissioner's office is responsible for completing an annual statewide appraisal of property, exclusive of utility property. The assessed values of property are established as of July 1 each year. The county assessor of each county is required to certify the assessment roll to the county board of equalization and review on January 30. The county board of equalization and review examines the assessment roll for a twenty-eight-day period beginning February 1 each year. The state board of public works certifies the public utility assessment roll on February 1. The equalized assessment roll is certified to each levying body within the respective counties on March 7 of each year. The board of education of each of the fifty-five county school districts in the state is required to adopt and submit a tentative budget for the next succeeding fiscal year to the state board of school finance by March 28 of the current fiscal year. The board of education is also required to submit an estimate of the tax levy required to support the tentative budget to the state tax commissioner by March 28. 152 The estimated tax levy, as submitted to the state tax commissioner, is required to be published by the board of education in two newspapers of general circulation in the county. The board of education is required to hold a public hearing of the budget and adopt the tax levy on the third Tuesday in April. The state board of school finance has no discre tionary authority related to the annual school budgets adopted by the boards of education but is required to re view and approve the annual budgets to determine compliance with the law. The tax levy necessary to support the annual budget must be approved by the state tax commissioner. The county treasurer of each county is required to submit a report to the board of education regarding the ending balances of funds and accounts after July 1. The board of education must review the budget, make necessary budget revisions, and adopt the final budget no later than August 15 each year. A copy of the budget for the ensuing fiscal year is required by statute to be filed with the state board of school finance and state tax commissioner no later than the third Tuesday in April of the current fiscal year. 153 The fiscal year for all school districts in the state begins July 1 and ends June 30. It was indicated that the relationship among the fiscal year, the school budget calendar, and the assessment calendar is not satisfactory. It was further stated that major difficulties are encountered in the budget develop ment process due to the fact that the tentative budgets are adopted in March prior to knowledge of the end of the year balances and the appropriation of funds by the legislature for the next succeeding fiscal year. It was stated that a major problem related to the assessment calendar is created for school districts because. property owned and assessed as of July 1 of one year is j used as the tax base for taxes levied during the fiscal year beginning the next succeeding July 1. Wisconsin Assessed values of property are determined by local assessors in the cities, towns, and villages of the state. The assessor is an elected official in the majority of cases who serves a two-year term of office. In many of the cities the assessor is appointed by the governing body of the municipality. 154 The state department of taxation is responsible for establishing the assessed values of public utility and railroad property throughout the state and establishes the full market value of property within each of the seventy- one counties. The department recommends the full market valuations of property to the county board in each of the counties of the state. The county board of each county is required to equalize assessed values within the county although the majority of counties use the equalized valuations determined by the state department of taxation. The taxpayer has the right to appeal to the state i department of taxation regarding the assessed values of ! property. The local assessor of each city, town, and village is required to certify the assessment roll no later than May 1 of each year. The board of education of each common school dis trict is required to adopt the budget for the fiscal year at the annual school district meeting that must be held on the fourth Monday of July. The board of education of each union high school district must adopt the budget for the fiscal year at the annual school district meeting that is required to be held on the third Monday of July. There are approximately forty-nine city school dis tricts in the state. The governing board of each city school district is required to adopt the annual budget before October 1 each year. The adopted budget must be filed with the city clerk before October 1 and the city council is required to consider the budget at its next meeting. A public budget hearing is required by statute. A notice of the public hearing and the place where the budget is available for public inspection must be published in a newspaper of general circulation no later than ten days prior to the hearing. The annual budgets of school districts that receive state financial support in excess of 50 per cent of their budget revenue must be'"'filed with the state superintendent of public instruction no later than July 1. The fiscal year for all noncity school districts begins July 1 and ends June 30. The city school districts operate on a fiscal year of January 1 to December 31. It was indicated that the relationship among the fiscal year, school budget calendar, and assessment calen dar is satisfactory, with the exception of city school districts. It was further stated that, if the fiscally dependent city school districts could become fiscally independent, the present fiscal scheduling relationship would be improved by adjusting the existing budget calendar to require earlier budget approval. Wyoming The assessed values of property are determined by the county assessor in each of the twenty-three counties of the state. The county assessor is an elected official who serves a four-year term of office. The state board of equalization is responsible for establishing the assessed values of public utility property and mineral producing property throughout the state. The board is also responsible for supervising local assessment, the statewide adjustment of property assessments, and the equalization of property assessments among counties. The county commissioners of each county are responsible for equalizing assessed values within the county and hearing taxpayer appeals related to the assess ment of property. 157 The county commissioners of each county set the levies for school districts the last week in July or the first week in August. The assessed values of property within the county are certified to the county commissioners before the levies are set. There are two types of school districts in the state: the first-class school district and the common school district. The first-class school districts operate under the provisions of the municipal budget act and are required to adopt the annual budget for the fiscal year the day follow ing the public budget hearing which must be held the fourth Wednesday in July each year. The common school districts are required to adopt the budget at the annual meeting held each year during any Tuesday in July. The first-class school districts are required to publish the annual budget in a newspaper of general circu lation in the school district or county prior to the public hearing of the budget. The common school districts are required to post a notice of the annual meeting, along with the total amount of the budget and the tax revenue amount needed to support the budget, thirty days prior to the 158 annual meeting. There are no legal provisions that require the filing or review of the annual budgets by any agency of ; the state, although the state department of education requests that each district provide a copy of the budget for informational purposes. The fiscal year for school districts begins July 1 and ends June 30. Chapter Summary The variability of the assessment calendar dates and assessing practices among the states, and in some cases , within individual states, is evident. In many states the ; ! regulation and supervision of property assessment is a responsibility of a designated agency of the state. The responsibility for the determination of assessed values of property in the vast majority of the states is vested with an elected or appointed county assessor. The range of divergence related to the assessing function varies from state centralized assessment of property to property assess ment performed by part-time appointed or elected officials of local governmental agencies. In the majority of states, 159 a state agency is responsible for establishing the assessed values of public utility property. The majority of states have a system of review and hearing of taxpayer appeals related to property assessment as well as a governmental body responsible for equalizing assessments. In many states actual assessment practices and procedures do not comply with existing statutes. In the majority of states the assessed valuation of property is used as a base for the distribution of state school financial support to the local school districts. The diversity of school budget calendar practices and procedures is very much in evidence among the states. Some states do not have budget calendar requirements, whilej other states have specific school budget calendar dates prescribed by law. In the majority of states the governing body of the school district is required to post or publish the annual budget and hold a public hearing prior to adop tion by the governing body. Some states have no legal requirements related to the posting, publishing, or public hearing of the annual budget. In some states the budget is approved annually by the electorate. Other states require approval of the annual budget by the governing board. 160 The majority of school districts in the states operate on a fiscal year period that begins July 1 and ends June 30. In many instances, school districts that are fiscally dependent operate on the fiscal year of the respec tive municipality or county, the most common period being January 1 to December 31. In some states the fiscal year period for state government differs from the fiscal year of school districts. In a few of the states there are no fiscal year dates prescribed by statute. The majority of states indicated that the existing interrelationships among the assessment calendar, school budget calendar, and fiscal year are not satisfactory. Other states indicated that the interrelationships are generally satisfactory. Many states expressed concern regarding the dates of receipt of tax revenue in relation to the fiscal year and budget adoption. In many instances the school districts in various states are faced with the problem of operating for an extended period of time without realizing adequate revenue and are thus forced to borrow funds or maintain large cash reserves. Many states indicated that a serious problem related to sound budget development is created by a lack of firm 161 revenue data prior to the required adoption of the annual budget. Other states related that although firm revenue data are not available prior to adoption of the annual budget, the assessor provided accurate estimates of the assessed valuation of property prior to budget adoption. Some states indicated that school districts are required to maintain two sets of accounting records due to the fact that the school district fiscal year and the fis cal year for state government differs. The following tabulation shows that the fiscal year for thirty-three states commences on July 1; for three states, January 1; for one state, October 1; for one state, September 1; and for eleven states the commencement date of the fiscal year varies with the districts. In addition, the table indicates that twenty-six states provide for the adoption of school budgets prior to the commencement of the fiscal year with seventeen states adopting budgets with known assessed valuation figures. The tabulation referred to completes the summary of this chapter. SUMMARY TABULATION OF FISCAL AND BUDGET DATES FOR FORTY-NINE STATES State Date Fiscal Year Begins Date Final Budget is Adopted Date Final Assessed Valuation is Known Alabama October 1 On or before October 1 September 1 Alaska July 1 On or before July 1 September 16 Arizona July 1 On or before July 12 August 15 Arkansas July 1 On or before October 1 Third Monday in November Colorado Varies by district (As of January 1, 1967, all will be gin January 1) Prior to beginning of fiscal year October 1 Connecticut July 1 Varies by district January 31 Delaware July 1 Before October 1 prior to fiscal year By the May just prior to beginning of fisca] year Florida July 1 No later than August 1 Assessment roll com- pieted by first Monday in July, but equaliza tion may continue f c j j indefinitely & SUMMARY TABULATION OF FISCAL AND BUDGET DATES FOR FORTY-NINE STATES— Continued State Date Fiscal Year Begins Date Final Budget is Adopted Date Final Assessed Valuation is Known Georgia Independent city districts Varies with district Prior to June 1 February 1 County districts July 1 Prior to June 1 February 1 Hawaii July 1 Operating budget is adopted by state legislature which convenes in February for the following fiscal year. Maintenance and construc tion budget must be adopt ed by the county board of supervisors 15 days prior to beginning of fiscal year Prior to February Idaho July 1 During annual meeting in June Second Monday in January Illinois July 1 Prior to last Tuesday in By June 30 September for the follow ing fiscal year ( j j SUMMARY TABULATION OF FISCAL AND BUDGET DATES FOR FORTY-NINE STATES— Continued State Date Fiscal Year Begins Date Final Budget is Adopted Date Final Assessed Valuation is Known Indiana January 1 Last Thursday in August March 1 Iowa July 1 On or before July 25 On or before first Monday in July Kansas Districts gov erned by a board of education July 1 On or before August 25 August 25 Common school districts and rural high schools July 1 First Friday in June August 25 Kentucky July 1 except for districts in cit ies of second class designation some of which operate with be ginning of Jan uary 1 By June 30 February 1 i —* CTi SUMMARY TABULATION OF FISCAL AND BUDGET DATES FOR FORTY-NINE STATES— Continued State Date Fiscal Year Begins Date Final Budget is Adopted Date Final Assessed Valuation is Known Louisiana f Maine July 1 No later than the first Tuesday in August November 15 Varies: most com mon is January 1 On or before April 1 April 1 Maryland July 1 (effective 1966) Anytime between January 1 and July 1 January 1 Massachusetts July 1 Town districts, December 10; city districts, by February 15 April 1 in odd num bered years and good for two years Michigan July 1 By the third Monday in April Fourth Monday in May Minnesota July 1 for all but 6 districts which have various dates No requirement No later than October 10 Mississippi July 1 No later than July 5 During month of August Missouri July 1 On or before July 1 After July 1 H cn VI SUMMARY TABULATION OF FISCAL AND BUDGET DATES FOR FORTY-NINE STATES— Continued State Date Fiscal Year Begins Date Final Budget is Adopted Date Final Assessed Valuation is Known Montana July 1 Fourth Monday in July Second Monday in July Nebraska All districts ex cept Omaha, July 1; Omaha, September 1 All but class IV and V on or before July 15; class IV and V, August 15 End of June Nevada July 1 No later than March 15 Third Monday in February New Hampshire All but city dis tricts, July 1; city districts, established by city charter Supervisory union dis trict prior to January 1; cooperative district, between March 1 and April 20; city districts, varies according to charters; all the rest of districts, be tween March 1 and April 20 No response New Jersey- January 1 Chapter VIII districts, January 22; chapter VII, January 29; chapter VI, February 15 October 1 i —1 New Mexico July 1 First Monday in September & November O' SUMMARY TABULATION OF FISCAL AND BUDGET DATES FOR FORTY-NINE STATES— Continued Date Fiscal Date Final Budget Date Final Assessed State Year Begins is Adopted Valuation is Known New York North Dakota Ohio Oklahoma Oregon July 1 North Carolina July 1 July 1 January 1 July 1 July 1 All common school dis tricts and one county district, first Tuesday in May; all union free and central school dis tricts, first Tuesday in May or third Tuesday in June or second Tuesday in July; all independent city districts, prior to June 30 By June 15, adopted by local governing board; by July 10, tax levying authority must take action Second Tuesday in July On or before January 1 Before end of July On or before June 30 On or before August 1 No response During month of October October 1 April 1 I-* : <n First week in June "l I SUMMARY TABULATION OF FISCAL AND BUDGET DATES FOR FORTY-NINE STATES— Continued State Date Fiscal Year Begins Date Final Budget is Adopted Date Final Assessed Valuation is Known Pennsylvania January 1, dis tricts of Phila delphia, Pitts burgh, Scranton, and Erie; July 1, all other districts Between February and June 30 for all districts ex cept the four named to the left February Rhode Island Varies with the dis trict: 25 out of 39 begin July 1 - Adopted at annual town meeting which varies with each town December 31 South Carolina July 1 Various dates between April 1 and June 30 January 1 South Dakota July 1 Prior to August 15 November Tennessee July 1 County districts, prior to April; city and special districts, prior to June 30 Third Monday in October Texas September 1 County districts, August 10; No later than all other districts, August 20 H August 20 SUMMARY TABULATION OF FISCAL AND BUDGET DATES FOR FORTY-NINE STATES— Continued State Date Fiscal Year Begins Date Final Budget is Adopted Date Final Assessed Valuation is Known Utah July 1 On or before June 30 First Monday in May by statute (month later in actual practice) Vermont Various Various Between May 11 and June 30 Virginia July 1 Prior to April 1 No response Washington July 1 First-class districts, no later than the first Friday in May; second and third-class districts, no later than August 1 November West Virginia July 1 No later than August 15 (tax levy adopted on third Tuesday in April) March 7 Wisconsin July 1 for non city districts; January 1 for city districts Common school districts, fourth Monday in July; union high school dis tricts, third Monday in May 1 H* O' ^0 SUMMARY TABULATION OF FISCAL AND BUDGET DATES FOR FORTY-NINE STATES— Continued State Date Fiscal Year Begins Date Final Budget is Adopted Date Final Assessed Valuation is Known July; city districts, prior to October 1 Wyoming July 1 First-class districts, day following fourth Wednesday in July; com mon districts, any Tuesday in July Prior to last week in July CHAPTER III IN-DEPTH STUDY OF THE STATE OF NEVADA Introduction As a result of the survey of the forty-nine states other than California, Nevada was selected for further study to determine the advantages and disadvantages of the procedures established for governmental budgeting. The basis for selecting Nevada was threefold as indicated in Chapter I, which would be appropriate to the problems and remedial actions under study in California. The personal team interview technique was decided j l upon as the appropriate method for obtaining an evaluation by those most concerned with governmental budgeting. Dr. J. L. Glaspey, Assistant Superintendent— Business Services, Clark County School District, Nevada, had been very active in the legislative arena on a statewide basis in accomplish ing changes in the governmental budgeting process. Because of this activity, Dr. Glaspey had become well acquainted 171 with leaders in the governmental finance field. Dr. Glaspey was contacted for recommendations on who should be interviewed to provide a broad cross section of opinion concerning the problem under study. Appoint ments were scheduled by telephone and confirmed by letter giving a brief outline of the topics to be covered in the interview. Those selected for interviewing were fairly evenly divided between the two centers of population. Five were located in the southern part of the state in the vicinity of Clark County and four were from the northern end of the state in the vicinity of Washoe County and the state capitol, Carson City. Those interviewed were as follows: 1. Mr. Robbins Cahill, County Manager, Clark County 2. Mr. James Gibson, Chairman, Ways and Means Committee, Nevada State Assembly 3. Mr. A. A. Pearson, Vice President and Treasurer Nevada Power Company 4. Mr. James Bilbray, County Assessor, Clark County 5. Mr. David Henry, City Manager, Sparks City 173 6. Mr. Donald Questra, County Auditor, Washoe County 7. Mr. Donald Perry, Assistant Superintendent in Charge of Business Affairs, State Department of Education 8. Mr. Robert Lawless, Executive Secretary, Nevada Tax Commission 9. Dr. J. L. Glaspey, Assistant Superintendent— Business Services, Clark County Schools Background Some major differences in organizational patterns from those in California are described as a setting for exploration into the three factors under study. In 1955, legislation abolished all local school districts and incorporated them into one district for each county. This reduced the number of school districts in Nevada to seventeen, with a range in A.D.A. from about fifty in Esmeralda County to 53,000 in Clark County. Eight dis tricts have less than 1,000 A.D.A. and, outside of Clark and Washoe counties, with about 22,000 A.D.A., there is no district with more than 3,300 A.D.A. Another major difference is the property tax struc- 174 ture as it relates to all governmental agencies. A $5.00 per $100 of assessed valuation tax rate limitation is im posed by the state constitution over all taxing agencies. ' That is to say, the aggregate property tax rate levied by the state, county, city, and school district cannot exceed $5.00 per $100 of assessed valuation. Voted bonds of any agency and the operating expenses of the state and school districts have first call on the tax dollar, leaving the county and cities to fight for the remainder of the rate. General dissatisfaction with the $5.00 tax rate limit was expressed by the respondents primarily because it encouraged bickering and lack of cooperation between the local governmental agencies. The county government appears! to be at the greatest disadvantage under this system be cause of a unique condition whereby voted bond elections by school districts or cities automatically reduce the tax rate available to the county. For example, assuming that the $5.00 tax rate limitation has been reached, if the citizens in a city voted an increase in the city tax rate to redeem a stated amount of bonds, the county general operating rate would have to be reduced in all county territory a like amount because the total aggregate tax 175 rate cannot exceed $5.00 in any one location in the county. Not much hope for correcting this situation was expressed because the tax rate limitation is deeply imbedded in the state constitution. The Nevada Tax Commission, a statutory board of seven members, exercises general control over the entire tax system and acts as the final authority in parcelling out the $5.00 tax rate to the various public agencies. Other functions of the commission will be explored in later sections as appropriate. Tax collections in Nevada were established during the depression years on a quarterly basis to benefit the taxpayer and thereby reduce delinquencies. One-fourth of the property taxes is due and payable on or before the first Monday in July, October, January, and March. General satisfaction with the quarterly tax collection was indi cated by taxpayer and governmental agencies alike and was credited with reducing the delinquency rate. With this brief background information on each of the areas of concern, the assessment calendar, budget calendar, and fiscal year will be reported in detail. 176 Assessment Calendar County assessors in Nevada must assess all property, exclusive of that assessed by the tax commission, as of the first Monday of September and certify the roll to the county auditor by December 31 of each year. Beginning on January 1 and continuing through January 31, the county board of equalization is in session at the county seat to hear appeals by taxpayers and to equalize the assessment. The state board of equalization convenes at the state capi tol on the first Monday of February and completes its work on or before the third Monday of February. The roll is then certified to the county auditor and the state tax j I commission at which time the assessment becomes final. By statute, reassessment is to be made annually on the basis of 35 per cent of cash value. In actual practice, according to those interviewed, annual reassessment does not take place with assessors making changes of assessed value only at the time of construction or sale based upon the selling price. There is no provision for enforcing the 35 per cent of cash value statutory requirement, so consequently not Ill all property is assessed at that percentage. However, state apportionments to school districts are reduced in direct proportion to the percentage which the assessed value of property within the county is below the required 35 per cent of cash value. Unlike California, there is no provision for the local district to recoup the loss in state funds by levying a special tax rate. Dissatisfaction with the present assessing proce dure centered around alleged lack of professionalism in assessing property and the length of time between the lien date and the commencement of the fiscal year. The indifference of assessors to the statutory requirements for annual revaluation and the per cent of cash value were pointed to as indicators for state con structed and supervised professional assessing standards. One respondent reported that one county assessor admitted confidentially that he had reduced the assessed value of all property in the county by 10 per cent for the 1965-66 fiscal year because of the close proximity to his re- election campaign. In general, the opinion was expressed that the problem of vested interest was not only exhibited at the assessing level but was evident on the state tax 178 commission, particularly when it convened as a state board of equalization. The time span between the lien date and the com mencement of the fiscal year was the second most mentioned problem with the present assessing procedure. Property which is developed after the lien date of the first Monday in September is not subject to property taxes until the second succeeding fiscal year, while governmental service would have to be provided during the immediate succeeding fiscal year. This latter problem becomes critical in fast grow ing areas where large parcels of property are developed over a short period of time requiring massive governmental services without contributing revenue to the support of those services. Consequently, a movement was reported underway to accomplish legislative action to move the lien date to shorten the time span to the commencement of the fiscal year. Those respondents responsible for budget construc tion were highly supportive of the existing relationship between the date for finalizing the assessed valuation figures and the date for adoption of budgets. Having known 179 assessed valuation figures approximately one month prior to budget adoption was reported as being extremely valuable to administrators and governing boards. A dissenting opinion concerning the desirability of having known assessed valua tion figures prior to budget adoptions was generally ex pressed by those respondents not responsible for budget development. As was found in the California study, the opinion was expressed that the taxing agencies tended to construct budgets to take full advantage of any increase in ; assessed valuation rather than to maintain the same level of expenditures and reduce the tax rate. Budget Calendar 1 On or before March 15 of each year all local governmental agencies must prepare a tentative budget for the ensuing fiscal year. The tentative budget must be filed with the clerk or secretary of the governing body, the county clerk, the Nevada Tax Commission, and, in the case of school districts, with the office of the state department of education. Notice of the time and place of a public hearing on the tentative budget must be given at the time the tentative budget is filed with the above 180 agencies. Said notice must also be published once at least seven days prior to the date set for such hearing (50:9). Budget hearings are held and final budgets are adopted on various days of the week during the third week of April depending upon the local governmental agency. The budget hearing for school districts is set for the third Wednesday in April (50:10). The Nevada Tax Commission must examine the sub mitted budgets for compliance with law and appropriate regulations and return to the governing body at least three days prior to the public hearing a written certificate of compliance or a written notice of lack of compliance. The written notice must indicate the manner in which the budget\ i fails to comply with law or appropriate regulations. The notice or certificate must be read at the public hearing. The governing body must amend the tentative budget to comply with law or regulations prior to adoption of the final budget on or before April 30 of each year (50:10-11). The above described procedure results in a final budget being adopted approximately two months after the assessed valuation becomes known and two months prior to the commencement of the fiscal year. 181 While the adoption of a final budget two months in advance of the end of the current fiscal year necessitates the estimation of ending balances, the respondents indi cated in general that this is far less objectionable than estimating assessed valuation figures. However, the estimating task is more of a problem with the smaller dis tricts due to the lack of adequately trained business administrators in their districts. The above budget calendar is described in The Nevada Local Government Budget Act, which was enacted by the 1965 Nevada legislature. This act was developed by a committee appointed by the Nevada Municipal Association, the Nevada Association of County Commissioners, and the Nevada School Trustees Association (50). One of the cri teria for selecting Nevada for further study was the fact that this budget act had been accomplished recently and had been accomplished with representative committee effort as indicated above. Because of the noncontroversial nature of this particular subject, it can be reported that without excep tion the respondents were highly complimentary concerning the procedure followed in accomplishing this legislative act. It was the opinion of many of the respondents that such a smooth passage of technical legislation had not occurred in Nevada for many years. Legislators and admin istrators concurred in this opinion. As indicated above, the representatives of the three state associations most concerned with local govern mental budgeting formed the working committee. In addition the committee called upon other interested persons to par ticipate in the deliberations. The legislative council, members of the Nevada Legislative Commission, the chairman of the Assembly Committee on State, County, and City Affairs, and representatives of the Nevada Taxpayers Asso ciation worked with the basic committee from time to time (50). It is significant that the bill was introduced to the assembly by the Assembly Committee on State, County, and City Affairs, the chairman of which was involved in the development of the budget act as indicated above. General agreement was expressed that the key to the successful passage of this legislation was the participa tion in the development stage of all those concerned, including possible critics, combined with the selection of an interested legislator who could steer the bill through 183 the legislative maze. Fiscal Year The fiscal year for all governmental agencies in Nevada commences on July 1 and ends on June 30 each year. The relationship of the fiscal year to the assessment calendar and budget calendar is such that the assessed valuation is known three months prior to the beginning of the fiscal year, and the budget is adopted approximately two months prior to the fiscal year. In general, those interviewed expressed satisfaction with the present fiscal year. In 1955 the state legislature changed the fiscal year dates from January 1 to December 31 to the present fiscal dates primarily as a result of pressure exerted so as to have known assessed valuation data and an adopted budget prior to the commencement of the fiscal year. Until this change was made, the interrelationship among the assessment calendar, budget calendar, and fiscal year was approximately the same as it is in California with the same resultant problems having been experienced by all governmental agencies. 184 The procedure used in accomplishing the changeover in fiscal years was for all governmental agencies to adopt two budgets: one which applied to the six months period between January 1, 1955, and June 30, 1955? and a second which applied to the full fiscal year of July 1, 1955, to June 30, 1956. A forgiveness provision was made for all property taxes during the six-months period with the governmental agencies utilizing the revenue from the two property tax payments made on the first Monday of January and March to finance the six months budget. According to those interviewed, the changeover from a calendar year to a fiscal year was a traumatic experience for those involved. The first presentation to the legislature resulted in failure but after further work, study, and maneuvering in the legislative arena, the measure passed the legislature. However, after initial attempts were made to work with the new law it was dis covered that provisions for changing dates for many related areas, such as the personal property tax rolls, were omitted and resulted in an unworkable law. An emergency session of the state legislature had to be called to pass corrective legislation to enable governmental agencies to function. Those interviewed generally expressed the opinion that changing the fiscal year should be given the last ; consideration in any attempt to provide for a better inter relationship among the assessment calendar, budget calendar, and fiscal year. The many and varied areas which are related to the fiscal year make an extremely intricate and complicated matter out of what at first glance appears to be a relatively simple one. Chapter Summary The organizational structure of Nevada provides for independent countywide school districts, cities, and coun ties, each with its own governing body. A seven-member state tax commission reviews all governmental agency budgets for compliance with law and acts as the final authority on the distribution of the aggregate maximum tax rate of $5.00 per $100 of assessed valuation among the state, school districts, cities, and county. The assessment calendar establishes the lien date as the first Monday in September with completion of the assessment procedure by the last week of February. General dissatisfaction was expressed with the relatively long span of time between the lien date and the commencement of the fiscal year, because facilities completed after the lien date required governmental services one year prior to con tributing to the cost of these services through property taxes. Having the assessment process completed prior to the adoption of governmental budgets was considered to be a strong aspect of the present assessment calendar. Adoption of all local governmental budgets in the state of Nevada is set for the last week of April each year Recent legislation proposed by a combined committee repre senting the Nevada Municipal Association, Nevada Associa tion of County Commissioners, and the Nevada School Trustees Association established the present budget calen dar. All respondents were complimentary in their comments concerning the present calendar and the work of the com mittee in accomplishing this legislative change. A change in the dates prescribing the fiscal year from January 1 to December 31 to July 1 to June 30 was accomplished in 1955 with many attendant problems. While the present fiscal year is considered more satisfactory by those interviewed, it was generally held that the fiscal year should be changed only as a last resort because of the complicated nature of such a change. CHAPTER IV IN-DEPTH STUDY OF THE STATE OF CALIFORNIA Introduction The study of California consisted of a search through available literature to determine present practices and required procedures, past concerns, attempts made to change the present requirements, and recommendations for change and the interview of leaders in the field of govern mental finance. Those selected for interview were as follows: 1. Mr. John H. Bevis, County Assessor, San Bernardino County 2. Mr. John McQuilken, County Assessor, San Diego County 3. Mr. W. Allen Ladd, Auditor-Controller, River side County 4. Mr. Charles B. Perry, Auditor-Controller, Solano County 188 189 5. Mr. Fred Sharp, Administrative Officer, City of Pomona 6. Mr. John Wentz, City Manager, City of Riverside 7. Mr. Howard Campen, Administrative Officer, Santa Clara County 8. Mr. Thurlow Heggland, Administrative Officer, San Diego County 9. Dr. Francis Laufenberg, Assistant Superintend ent— Business, Long Beach Unified School District 10. Mr. Sam E. Waldrip, Assistant Superintendent— Business, Torrance Unified School District 11. Dr. Charles Benson, Professor of Education, University of California at Berkeley 12. Dr. Thomas James, Professor of Education, Stanford University 13. Dr. Frank Sherwood, Professor of Public Admin istration, University of Southern California 14. Mr. George A. Terhune, retired Professor of Public Administration, University of Southern California 15. Mr. Phillip Watson, County Assessor, Los Angeles County 16. The Honorable John T. Knox, Chairman, State Assembly Committee on Municipal and County Government 17. The Honorable Joseph A. Rattigan, Chairman, State Senate Committee on Local Government 18. Dr. Ronald W. Cox, Associate Superintendent of Public Instruction and Chief of the Division of Public School Administration, State of California Department of Education 19. Mr. Richard Nevins, member of the State Board of Equalization, fourth district 20. Mr. Joseph M. Lowery, retired and former Auditor-Controller of Los Angeles County 21. Mr. J. Roy Holland, Director of Research, California Taxpayers Association 22. Mr. Frank M. Reid, President, California Cham ber of Commerce Executives Association As indicated in Chapter I, references to the sub ject under study were found as early as the decade of the 1920's. The earliest reference found was a text by A. E. Buck published in 1926. Various studies and texts since 191 that time have commented on or made recommendations con cerning the proper interrelationship among the assessment calendar, budget calendar, and fiscal year. The combination of outdated tax rate limitations established during the preinflationary depression years and the increase in the per cent of public school support by the local property tax base has led to the increased inter est on the part of public school administrators to find a rational solution to the problem. The solution proposed by three of the respondents to delay expenditure programs involving employment of staff, equipment purchases, main tenance work, and the like has long been in practice but 1 will no longer satisfy those interested in a complete implementation of the educational program. With the larger portions of the educational dollar coming from local taxa tion, the size of the ejqpenditure plan which must be de layed has also become larger, thereby making it almost impossible to limit expenditure delays to just those items which will not impede instructional progress. The students are at school on opening day in September, and there must be adequate staff, facilities, and equipment ready to serve them if the schools are to perform the functions for which 192 they exist. If it can be agreed that the essence to the exist ence of any public school employee is to serve the educa tional endeavors of the district, it can also be agreed that it is incumbent upon those responsible for the fiscal affairs of the district to find ways to assure that the business services division is as efficient as possible so it can provide optimum service to the instructional pro gram. It is with this thought in mind that the authors embarked upon this study. Assessment Calendar 5 Background The legal provisions describing the assessment calendar as well as other assessment procedures are found in the Revenue and Taxation Code. Section 405 provides that annually the assessor shall assess all taxable property in his county except state assessed property to the persons owning, claiming, possess ing, or controlling it at twelve o'clock meridian of the first Monday in March. The assessor shall ascertain such property between the first Mondays in March and July. (63:section 405) Similar provisions in sections 751 and 753 describe that the state board of equalization shall assess all state assessed property as of the first Monday in March and com plete the process by the third Monday in August (63:sec tions 751 and 753). Both the constitution of the state of California and the Revenue and Taxation Code provide that taxable property shall be assessed at full cash value or actual value (62:Article II, section 12; 63:sections 401 and 751). It can logically be inferred from the above that the state board of equalization and county assessors must reassess all property each year. On the one hand, an annual assessment of taxable property is required, and on the other hand, property must be assessed at full cash value. Therefore, if the value of property is not updated each year and kept in line with present market values, the legal provisions would not be met. The bearing on and significance to the problem will be explored later, but suffice it to say here that if all taxable property were subject to an annual reassessment, the large periodic fluctuations in assessed valuation would not be experienced by school districts as under the present system where some fraction of the county is reassessed each year. Another inference which can be drawn from the statutory provisions mentioned above is that the primary function of assessing officers is to identify the property tax base for use by governmental agencies and special dis tricts which rely on the property tax for revenue. By definition, assessment is the official act of discovering, listing, and appraising property for taxation purposes (67:26). Investigation found the existence of some devia tions from the statutory provisions and considerable varia tions in practice between counties. Swanson found that property is assessed at a fraction of full cash values in California with the blessing of the courts (76). This fact was verified with the respondents interviewed for each of the counties. A further deviation from the inferred statutory requirements was found to exist in all but one county in that annual total reassessment does not take place. Varia tions of the fractional reassessment method were found to be most common. This method involved a reassessment of one-fourth or one-fifth of the parcels located within the county each year, plus any specific areas experiencing concentrated growth. 195 The one notable exception to this procedure is Los Angeles County where, with the use of data processing equipment, the assessor is able to provide a continuous reassessment by using a sales ratio approach conducted by a quarterly review of each field book area. Experimenta tion with similar approaches to the reassessment problem is being conducted in Santa Clara and Marin counties. The use of data processing in some portion of the assessment pro cess was common practice and, in general, the representa tives of the assessors profession were deeply interested in finding ways to improve assessment practices through the use of data processing equipment. Identification of the problem Under the present statutory provisions, public hearings are held and budgets adopted by all public agen cies prior to a knowledge of the official assessed valua tion. The question uppermost in the minds of interested citizens and members of governing boards is exactly what does the proposed budget mean in terms of the local proper ty tax. Under the present system a definite answer cannot be given. 196 Administrators responsible for budget preparation attempt to meet the need by projecting estimates of the new assessed valuation based upon historical data, value of building permits, and interviews with developers (4:419). However, these methods result in estimates which will still vary considerably from the final assessed valuation depend ing primarily upon actions taken by the assessor in re assessing property within the agency's boundaries. One administrator interviewed flatly refused to predict a tax rate for the budget he presents to his governing body. Two other administrators missed predicting the assessed valua tion by a considerable amount this year because of reassess-* 'ment programs taking place in their respective counties. j In the case of one of these latter two administrators the local newspaper played up the error in prediction with front page headlines and vitriolic criticism of the admin istrator and the public agency involved. Needless to say, this administrator has now determined that he will no longer be forced into predicting assessed valuation figures or tax rates. In general, the rest of the administrators interviewed indicated that they had experienced similar problems in the past and expressed a strong desire to reach 197 a solution to this matter. One administrator indicated that the more information the administration and governing bodies have at hand before making major decisions, the better job they can do for the community. In general, the respondents agreed that ideally a budget should be adopted on the basis of as much known data as are available, but they were in disagreement as to whether or not this would be practical for public taxing agencies. Accusations have been made that local public agencies tend to increase with ill-considered last minute proposed expenditures to take advantage of assessed valua tion increases (76:40; 39:9,10,11). As one would suspect, the public agency administra tor respondents generally disagreed that this took place, while the rest of the respondents, in general, held that, human nature being what it is, the public agencies did tend to increase budgets to take advantage of unpredicted as sessed valuation increases. However, this latter group did agree in general that this should not be a concern of assessing officials but, rather, a concern for citizens of the local agency. It was during this phase of the inter views that the expression that assessing officials should 198 be, and for the most part are, concerned with property values and not tax rates was reiterated by practically all of the respondents. A notable exception to this latter point of view is Mr. Phillip Watson, assessor of Los Angeles County. He has stated publicly on several occasions, as well as being quoted in newspaper articles, that when taxing agencies know the assessed valuation prior to budget adoption they will increase expenditures to take advantage of any in crease in assessed values and blame the resulting increase in the tax bill on the county assessor. According to Mr. Watson, the assessor must protect the taxpayer by not dis closing the roll until after budgets are adopted. To further his crusade to protect the taxpayer, Mr. Watson has proposed legislation to impose an aggregate tax limit of 2 per cent of market value which would operate in much the same way as the $5.00 per $100 of assessed valuation aggre gate tax rate limit imposed in the state of Nevada. The preponderance of evidence in the literature would indicate that assessed valuation figures should be known prior to the adoption of a final budget. Campbell supported this concept when he stated, "It is likewise 199 apparent that assessment figures should be available during the preparation of the budget." (10:22) Lovik found that the present schedule was detri mental to good budgeting practice and stated his findings as follows: "Another area found not to be conducive to good budget planning in California is the fact that the budget must be presented and adopted prior to knowing the assessed valuation." (75:70) In the interest of efficient local government, the Pennsylvania Economy League, Inc. recommended to the Local Government Commission of the Pennsylvania General Assembly that the assessment rolls be completed and in the hands of local governing bodies in time for preparation of budgets as one of five basic principles of fiscal administration (37). Several different proposals for solving, or at least reducing, the problems identified were discovered in the literature and were proposed by those interviewed. Proposed solutions The condition which brings the problem into sharp focus exists when a periodic major assessment takes place within the boundaries of a particular agency. Any estimate 200 proposed under these conditions is usually highly inaccur ate . This was recognized by the International Association of Assessing Officers when they stated, The substantial changes occurring in reassess ment years in states in which real property is revalued infrequently are seldom properly antici pated by local governments. Public planning, budgeting, and debt policies are thrown into con fusion. (1:29) A solution has been proposed to eliminate these large and highly unpredictable changes in assessed valua tion resulting from infrequent revaluations by providing a continuous or annual reassessment program (21:151-52). In fact, the annual revaluation of property is listed as an i | assessment principle in the International Association of Assessing Officers book, Assessment Principles (1:28). In general, the reaction to this proposal from the assessing officials interviewed was that it would be too expensive to operate. One respondent suggested that chang ing from the practice of revaluating one-fourth of the county each year to an annual revaluation program would require approximately four times the staff to accomplish four times as much work. 201 The International Association of Assessing Officers countered with the argument that annual revaluation greatly reduces or eliminates cyclical or even seasonal fluctuations in assessment work, thus permitting the use of a full-time staff of carefully chosen, trained, and experienced em ployees (1:29). They further stated in this regard, "It is not generally appreciated that the apparent economy of infrequent assessment is largely absorbed in the cost of training temporary help and that any net savings is pur chased at the price of serious inequities." (1:29) In addition, with the use of data processing machinery on the increase and with experimentation in prog ress with intent of finding further uses of data processingj in the assessing process, it would appear that annual reassessment could become a general practice. As indicated previously, the largest county in the state of California is now on an annual reassessment program utilizing data processing equipment. The second proposal for change was to require that the assessment roll be completed at some date earlier than presently required by the statutes. In general, the respondents who were administrators of public agencies 202 suggested that if the assessment roll were completed and made available to public agencies by the first of June, or at the latest the middle of June, this would be a major solution to the problem. Two respondents suggested that ideally the roll should be completed and made available to the public schools prior to the May 15 date for reemploy ment of existing certificated personnel. The main objection to the movement of the deadline date for the completing of the roll to something earlier than it is, is that it shortens the period of time allowed to assessors from the lien date to the completion date. In general, the assessing officials interviewed were not too concerned about dates as such. As one respondent indicated, all the dates do is describe a period of time during which something must be accomplished. However, the assessors * were concerned about the length of time allowed them to accomplish the work that must be done. Therefore, in general, the indication was that if the completion date were moved to an earlier time, the lien date should also be moved by at least a corresponding period of time. In general, respondents from the taxing agencies and those involved with assessing were in favor of moving the lien date from the first Monday of March to the first of January. There was no objection, in general, from those respondents not connected with the actual function of budg et-making and assessing property to such a movement. How ever, it was brought out that there would possibly be some objection from representatives of the farming community to such a change. It was generally agreed that the initial setting of the lien date as the first Monday in March was to accommodate an agrarian society at the time of the formation of the state of California. In previous attempts to change this lien date, objections by the farming commun ity had been strong enough to forestall any such action. Originally, it was thought that some objections would be forthcoming from the business community, but in discussions with respondents familiar with the requirements of business in the state of California, it was found that there was no real great advantage to business in having a lien date as of the first Monday in March. In fact, there can be found some advantages for such a change for the business community in that it must make certain inventory claims as of the first of January for federal government purposes. This would also be at a time of year when 204 business typically has a low inventory after its Christmas rush and prior to the restocking in preparation for spring sales. So the net effect to business would be to reduce some of the clerical responsibilities in regard to inven tories . The first of January was suggested instead of the first Monday of January because it was indicated that a specific date which remains the same each year is more advantageous for scheduling purposes than a variable date. Even though the first day of January is a holiday, it would not affect the determination of property ownership on that date. Proponents of changing of the lien date to the first of January suggest that making such a change, along with changing the completion date for the total roll to the first of June, would make a compromise with assessing officials whereby the length of time allowed them for com pleting the roll would be extended by one month, and it would give the taxing agencies the information one month earlier than they now receive the local roll and two months earlier than they now receive the board roll. Another disadvantage, however, to such a change in 205 the lien date was mentioned by one respondent in that fast growing districts would lose two months of assessed valua- \ tion. That is to say, construction completed during the months of January and February would not be included in the tax rolls until the next succeeding tax year, some eighteen months later. Whereas under the present system, the con struction completed during these two months brings in revenue on the immediate succeeding fiscal year. A third proposal which in reality would have to be concurrent with a change in the date for completing the roll to June 1 is to utilize the completed roll for comput ing the tax rate for each of the taxing agencies. As the system is presently constituted, the tax rate is computed and set by the county board of supervisors after equaliza tion hearings have been held and budgets adopted. It was found in our investigations that the change typically tak ing place in the equalization process was considerably less than 1 per cent, in Los Angeles County a board of appeals has been established to hear all complaints concerning the assessed value assigned to property within the county. This appeals board acts practically on a year-round basis, so that at no one particular time is there a finalized, 206 equalized assessment roll. In that particular county the tax rate is established on the basis of an unequalized roll for all practical purposes. inasmuch as the establishment of a tax rate is a computational process, the completed roll prior to equalization could be used as a base for computing the tax rate for each of the agencies. By establishing such a procedure, it would allow for each taxing agency to adopt its budget on the basis of known assessed valuation and at the same time establish the tax rates. Budget Calendar Background j ; I The legal provisions for the budget calendar are found in chapter 2, Division 16, of the Education Code of the state of California. Section 20601 of the Education Code states, "On or before the first day of July in each year, the governing board of each school district shall file with the county superintendent of schools a tentative budget .... (64:section 20601) Section 20605 of the Education Code requires that the county superintendent of schools examine the tentative 207 budget and indicate any changes he deems desirable or necessary and must return the tentative budget to the governing board on or before the fifteenth day of July. Section 2 0606 of the Education Code provides that the governing board shall take action on the returned tentative budget which then shall constitute the publica tion budget. The publication budget must be returned to the county superintendent of schools no later than the twentieth day of July. Education Code section 20651 pro vides for the final adoption of the budget on or before the eighth day of August, or on or before the tenth day of August in the case of school districts with an average daily attendance of 10,000 or more. The budget calendar as described provides for a relationship with the fiscal year and assessment calendar such that the final budget is adopted after the completed local roll but prior to the completion of the board roll and one month after the commencement of the fiscal year. Identification of the problem All but two of the respondents interviewed indicat- 1ed that the present calendar, which provides for adoption of the final budget for school districts one month after 208 the beginning of the fiscal year, is nonsensical and should be corrected. It was indicated that the present procedure could not be defended on any basis and certainly does not meet sound accounting principles. It was found that many cities and counties have provided for final adoption of their budgets prior to July 1 even though this is not required by state statutes. Two dissenting opinions in this regard indicated that this was just a procedural accounting problem which could be solved without too much difficulty. One of the latter two respondents indicated that it could be readily solved by increasing the reserves, a solution which would be objected to by the California Taxpayers Association which wishes to reduce reserves carried by taxing agencies. Under the present method, all expenditures made during the month of July are accomplished prior to the opportunity for the citizens of the community to register their opinions concerning the proposed budget. If they happen to disagree with the portion of the budget which has been expended during the month of July, there is really nothing much that can be done to take into account their suggestions. If, on the other hand, expenditures for summer maintenance, employment of new staff members, and so on must be delayed until the public hearing is held and the final adoption of the budget is accomplished, such delay may have a detrimental effect on the educational program which must commence in September. It would seem that the suggestion for increasing the amount of reserves to take care of this problem still does not resolve the situation whereby expenditures are made prior to final authorization to make those expenditures. The question here is not one of whether or not there is enough money to make those expenditures as was discussed in the prior section on knowing assessed valuation data, but is one concerning the commencement of an expenditure plan prior to its approval by the community and adoption by the governing board. As was noted in Chapter II, the most common prac tice throughout the United States is the adoption of the final budget prior to the beginning of the fiscal year. Ovsiew and Casteter found this also to be the case and reported, "Adoption of the budget prior to the beginning of the fiscal year is the practice most often followed by local school districts." (21:87) 210 In a letter to the Senate Interim Committee on State and Local Taxation, in 1955, the County Auditors Association of California stated, "We sincerely believe all public agencies should adopt a fixed financial program for a fiscal year in advance of the start of that year and that no expenditures should be made until such a budget is adopted." (39:10) As a result of the study conducted by senate inter im committee, it reported, "Sound fiscal administration would require that the financial plans under which a unit of government is to function for an ensuing fiscal year be adopted and effective as of the beginning date of that fiscal year." (39:10) As Wright stated it, "Actual expenditures of funds for personnel and other needs during July and August are made without any authorization for funds as is required by final approval of the district budget during the first week of August." (77:179) Unanimous agreement was found among authorities in the area of budgeting procedures that it is not a good practice to incur obligations and make expenditures prior to the regular adoption of the budget. 211 Proposed solutions In general, the administrators interviewed sug gested that the budget calendar be moved back to earlier ; dates to provide for adoption of the final budget by June 30. Some concern was expressed that the budget should not be adopted too far in advance of the ending of the fiscal year because considerable revenue is dependent upon infor mation based upon the current fiscal year. It would seem desirable to provide for final adoption of the budget as near as possible to the end of one fiscal year and the beginning of the next, to insure the knowledge of as many facts as possible and still pro vide for adoption of the expenditure plan prior to embark ing on that plan. The importance of data to budgeting was expressed by Ovsiew and Castetter as follows: Necessary to any problem solving process are facts. The more facts available to those responsible for developing the budget, the more reliable is the exercise of judgment and the smaller is the margin of error. (21:117) Contrary to the line of thinking expressed above, one respondent suggested that the budget should be adopted prior to the setting of teachers' salaries and reemployment of staff. This would mean adoption sometime prior to May 212 15. Adoption of a budget prior to May 15 was found to exist in a number of school districts in states other than California. As was indicated in chapter III, the Nevada statutes require the adoption of final budgets for all taxing agencies in April. The Nevada respondents in gen eral supported the April adoption date as being the best for them, although they did indicate some difficulties in projecting ending balances for the current fiscal year. De Young pointed out that there is advantage to both an early adoption and a later adoption near the begin ning point of the new fiscal year (12:4). He preferred adoption prior to the fiscal year but concluded that the best interest of the school must be served, and if better forecasting can be accomplished by a later adoption it should be done (12:66). A compromise to these two views would be to provide for the adoption of a tentative budget prior to May 15 and the adoption of a final budget in June. Wright suggested such a solution when he recom mended a May first deadline date for holding a public hear ing and adoption of a tentative budget: 213 It is recommended that the basic law providing for school district budgets be revised to provide that the tentative budget shall be filed with the county superintendent of schools on May first preceding the year for which the budget is to apply, and that there shall be held an advertised budget hearing on or before May first for the purpose of providing the patrons of the school district an opportunity to voice their approval or disapproval of the pro posed tentative budget. (77:249) When all factors are considered, the final budget adoption should be subsequent to the date established for delivery of the assessment roll to the taxing agencies. If the completion of the roll is set for a date during the first two weeks of June, the adoption of the final budget could be accomplished during the last two weeks. Some flexibility could be allowed the districts by establishing i ] a deadline date by which the budget must be adopted, leav ing the actual date up to each individual governing board. Fiscal Year Background The commencement of the fiscal year for all govern mental agencies in the state of California has been set by the California state constitution. Article 20, section 5, as the first day of July. The relationship of the fiscal year to the budget calendar and assessment calendar has 214 been noted in previous sections of this chapter, but briefly it is noted here that the budget must be adopted during the first week of August, the local roll is finalized the third Monday in July, and the state roll is finalized by the third Monday in August. The relationship of the fiscal year to the opera tion of school districts is such that the fiscal year does encompass one cycle of operation present in a school year. ' That is to say, with the school actually in operation and educating students from the latter part of August or the early part of September to approximately the middle of i June, the activities of a school district are commenced and; 1 ended during the span of one fiscal year. Contractual obligations for certificated and classified staff for one year1s operation to service the educational program can be commenced and included during the present fiscal year. In evaluating the fiscal year it should be viewed simply as the legal division of the twelve months in the year for the purpose of financial accounting. In other words, it is the period of time which describes the fiscal activities of the particular public agency during the twelve-month period. For the fiscal year to serve the 215 agency, it should span a period of time which encompasses one cycle of operation for a particular agency. In the evaluation then of the fiscal year, it must be considered whether or not it encompasses this cycle or what could be called the natural year for the agency or business. As Campbell stated, "The fiscal year in use may hinder or facilitate the functioning of the budget as an instrument of control." (10:22) Another criterion which must be considered in the evaluation of the fiscal year is the relationship of the public agencies under study to the fiscal year prescribed for the state government and the federal government. The importance of this concept is that as a local public agency, school districts must make reports to the state and federal governments which describe the activities dur ing any particular fiscal year. If the fiscal year of the local agency varies from that prescribed for the state or federal government, the difficulties of submitting annual reports become greatly increased. As it was shown in Chapter II, in some of the states a variable fiscal year exists within the state for all the public agencies there in. The complaints of the respondents in those particular 216 states indicated that this creates considerable problems in making annual reports to the state and federal governments. Identification of the problem The problem existing in the present interrelation ship among the fiscal year, budget calendar, and assessment calendar has been referred to in the previous two sections . of this chapter. Briefly, the problem that exists present ly is that the budget is adopted one month after the com mencement of the fiscal year, thus necessitating the opera tion of the school district for one month prior to the authorization to actually expend those funds by the adoption of a legal budget. Also, the fact that the assessed valua-, i tion is not known until after the commencement of the fis cal year and after the adoption of the final budget adds to the problem. A third problem concerning the fiscal year was mentioned frequently both in the literature and by those interviewed after the study was under way. The expressed concern was over the fact that while the fiscal year commences on July 1, tax revenues are not received until the first of December, resulting in a five-month period of time during which public agencies relying upon the local tax rolls for revenue are without substantial 217 amounts of income to finance the agencies' activities dur ing that five-month period. This was more of a problem with public agencies who do not have sources of revenue other than the local property tax. As Buck expressed it, Another important factor from the standpoint of budgeting which'has a bearing on the fiscal year, is the arrangement of the tax calendar. Tax collections should start early in the fiscal year so that adequate funds will be available to meet the current bills of the government. Otherwise, it will be necessary either to carry over a surplus for this purpose from the preceding year or to resort to the expedient short term borrowing as a means of current financing. Neither of these methods is as desirable as having the in-flows of revenue approximately equal to the out-go of the government. The latter condition can be brought about only by synchronizing the tax calendar with the fiscal year. (7:334) Mr. J. M. Lowery, then auditor-controller of Los Angeles County, in 1956 testified to the same problem before the Assembly Interim Committee on Municipal and County Govern ment when he said, All counties, all school districts, most cities, and most special districts are confronted with the intolerable problem of operating the first five or six months of each fiscal year without any general property tax revenue available to them. In most instances this is the major source of revenue. In order for the budgeting process to be enhanced by fiscal dates required for the fiscal year, budget calendar, assessment calendar, and tax collections should be brought into closer interrelationship. (41:3) 218 Proposed solutions In 1956 the Assembly Interim Committee on Municipal and County Government took under study a proposed change from the fiscal to the calendar year for all public agen cies in the state of California. Under such a plan the dates for assessing, budget adoption, and tax collection could be left as they are, resulting in the adoption of a budget and the collection of the first installment of property taxes prior to the beginning of the fiscal year. Mr. J. M. Lowery, in testifying before the committee on September 25, 1956, stated the advantages to such a plan in the following manner: Now, my proposal is to change the fiscal year from one starting July 1st to one starting the following January 1st. Under that plan all proceeds from tax levies will be available before the start of the year to which they apply. That is, before or immediately at the start of the year so that we won’t have the problem of borrowing. All general reserves that are now in existence can be used to reduce the tax levy of that first year of transi tion because they won't be needed any more. They won't need any funds for financing the dry period The budget will be adopted on the regular statutory date which is the 30th of August and before the year to which it applies begins. At the time the budget is adopted (I am speaking of counties) the valuations will be finalized and fixed so the board of supervisors will have before them, when they adopt the final budget, the valua tion which is the other factor which determines 219 the tax rate. They do that as of the 30th of August, which presently is two months after the year to which the operation applies has begun. Then the tax rate could be adopted on the present date, September 1st, and the first half of tax collections available on September 10th. The year would start January 1st and the money would be pro vided for the year for which it was levied. (41: 10-11) The disadvantages to such a plan, of course, are several. Number one, a fiscal year commencing on January 1 would not span the natural year for a school district. There would be parts of two school years included in any fiscal report. The problem of teacher contracts would have to be resolved if January 1 were to become the beginning of the fiscal year. Reporting would be made more difficult if made to the federal government which is on a July 1 to June 30 fiscal year. Wilkins has stated the objections to a calendar year for fiscal purposes in the following manner: Because of the need of budgetary procedure to in clude one academic year, this procedure is not feasible. Contractual agreements with teachers are more conveniently made for the academic year. Teachers' contracts would overlap part of two fiscal years if the above change should be made. The services which are being offered by the schools could not easily be commenced or termi nated in the middle of the school year. (26:41) Another major objection, or obstacle, to such a change is the problem of financing the year in which the change to a calendar year was made. Either a budget would have to be adopted and the taxes levied for a short period of time of six months or for an extended period of time of eighteen months to accomplish the change to the calendar year. While many proposals were made to the Assembly Interim Committee on Municipal and County Government at its hearing on September 25, 1956, it was generally agreed by those interviewed that they offered almost insurmountable problems in other areas of finance. Because of these prob lems of financing the year of change and the fact that a January 1 commencement for the fiscal year would hinder the operation of the public schools, the suggested change to the calendar year was dropped as a logical solution to the aforementioned budgeting problems. In general, the respondents interviewed favorably agreed that there is nothing particularly sacred about the dates prescribing the fiscal year. However, it was generally expressed that once the fiscal year had been established, changing it would be extremely difficult to accomplish. There was only one respondent in favor of 221 changing the fiscal year to a calendar year. A second solution proposed was that of changing the fiscal year from July 1 through June 30 to September 1 through August 31 for school districts only. The propon ents of this change pointed out that such a fiscal year would still span the natural year for public schools but would also solve the problem of the adoption of a budget prior to the beginning of the fiscal year. Under such a plan, the assessment calendar dates and budget calendar dates could be left as they are. In addition, the begin ning of the fiscal year would be brought two months closer to the first receipt of property taxes collected and there by reduce the financial "dry period" for public schools. Objections to this proposal somewhat paralleled those objections expressed concerning a change to a January 1 date for the beginning of the fiscal year. Although teachers' contracts would still be within one fiscal year, the reporting of fiscal matters to the state of California and the federal government would be greatly increased with school districts on a separate fiscal year from all other public agencies within the state. One of the problems expressed with the present interrelationship among the 222 three factors; namely, the period of time between the required date for reemployment of certificated staff and the final adoption of the budget would not be reduced by changing the fiscal year to a September 1 date. The final obstacle to making any change in the fiscal year is that the fiscal year as indicated previously is established by the constitution. To deal with the practical side of the problem, one must consider whether or not it is feasible to expect that a change could take place. Obviously, a constitutional amendment would have to be pro posed to the legislature and to the public in a general election. A considerable amount of time, effort, and money would have to be spent to insure that all the people would | t be informed of the benefits of such a change. A third problem area, concerning the period of time between the beginning of the fiscal year and the receipt of tax revenue, could be alleviated by changing the tax collection dates rather than attempting to change the date of the fiscal year. Two solutions to this problem could be considered. As was noted in the chapter reporting on the study of the state of Nevada, a quarterly system of tax collections has been utilized in Nevada for a number of 223 years. This provides for the collection of the first pay ment on taxes, effective July 1 and delinquent on August 1, with the remaining three collections becoming due and payable on October 1, January 1, and March 1. The effect of such a tax collection calendar is to level out the tax revenue through the fiscal year, thereby eliminating the dry period which must be financed by borrowing or carrying large general reserves. The second proposal was for the payment of taxes four times during the year with the amount to be paid each time determined by the taxes levied by one of the taxing agencies. In other words, the first payment of taxes which might be due on August 1 would be for school districts. The next payment of taxes would be for county government, and so forth. One purpose of the latter system of tax collections would be to identify a distinct amount of money with the particular taxing agency which has levied the tax. According to the proponents of this plan it would eliminate the identification of the total tax bill with the county and bring into focus the amount of taxes levied by each of the taxing agencies within the county. In discussing the suggestion of changing from a 224 semiannual tax collection to a quarterly or multiple collec tion system, it was generally expressed by those interviewed that this concept was worth further study. In the opinion of the authors, the suggestion for the possibility of tax collections on a basis other than semiannually was in general a new concept which the respondents had not con sidered previously. The first reaction on the part of two of the respondents was that such a collection procedure might increase the paperwork and, therefore, the cost of collecting taxes beyond a feasible point. However, upon further reflection, even these two expressed a desire that such a proposal be considered further. Inasmuch as the tax collection process was beyond the scope of this study, j no further attempt was made to determine the feasibility of multiple tax collections within a fiscal year. Tax Rate Limitations A comprehensive study on the subject of tax rate limitations was recently completed at the University of Southern California by Dr. Robert E. Ferris, entitled "Statutory Controls Governing School District Taxation" (74), so no attempt will be made here to go into any detail 225 on the problem of tax limitations. However, as the authors proceeded through the interviews in accomplishing this study, the effect of tax rate limitations upon the problem of adoption of a budget prior to the availability of known assessed valuation data was mentioned so frequently that it was thought to be worthy of note as a special section within this study. A paper presented to the Assembly Interim Committee on Municipal and County Government at its hearing on September 25, 1956, by Dr. Frank M. Wright, succinctly represents the thinking of those interviewed in this study approximately nine years later. The statement was as follows: The existence of a legal maximum tax rate together with lack of knowledge of assessed valuation pro hibits a school district from adopting a realistic budget based upon educational need and requires them to gear the educational program to a fixed amount of income. These two factors tend to operate to guarantee a maximum tax rate by keep ing the budget high enough to be certain that any increase in valuation will still require the maximum tax rate. This procedure completely nulli fies any reasonable budget preparation or adminis tration. It tends to give truth to the definition sometimes given to school district budgets: "A school budget is a compilation of figures designed and arranged to guarantee a maximum tax rate." Good budget procedure would completely divorce assessed valuation from the needs. Emphasis far 226 beyond the attention it deserves is often given to the tax rate. The tax rate is not basic. The basic item is the amount of money to be raised. . . . The tax rate is simply a ratio of the need to the value of property, and it can vary without affecting either the property value or need. The governing board of a school district and the local county assessor both can be the "whipping boys" for the tax rate, a situation which is illogical. Elimination of maximum tax rates would give the greatest assistance in the preparation of a realistic school district budget which would have to stand on its own merit. (41s52-53) In general, the respondents indicated that tax rate limitations should be erased completely or at least raised to a level in keeping with the inflationary spiral experi enced since the depression. Time and again it was ex pressed by the public administrators interviewed that the present tax rate limitations unnecessarily spotlighted the j problem of unknown assessed valuation data and encouraged local agencies to overemphasize the tax rate, as Wright pointed out above. There was general agreement among those interviewed that a budget should be prepared on the basis of programs determined by the taxing agency without regard to what the assessed valuation or tax rate would be. In general, the respondents stated that safeguards for taxpayers were still available to them if a taxing agency raised the tax rate too high by virtue of the fact 227 that they could go to the polls and remove the elected officials responsible. One suggestion was made, however, that if the tax rate limitations could not be erased com pletely, they should be raised to a more realistic level with provisions for them to increase with the economy. School District Budgeting Practices Another area of concern which was not a part of this study was the budget practices employed by school dis tricts but about which many comments were received from those interviewed. Because of the frequency of disparaging comments relating to school district budgeting practices, the authors decided this finding should be reported. More than half of the respondents either expressed directly or inferred indirectly some dissatisfaction with budget practices utilized by school districts in general. The most frequently mentioned suggestions for improvement centered around a line-by-line budget and a program budget, both with historical information concerning comparable data for the preceding and next preceding fiscal year. A lack of confidence in local school administrators seems to result from this criticism which in turn seemed 228 to inhibit attitudes toward support of any changes result ing in increased local determination and responsibility. It was not the purpose of this study to determine whether or not there was justification for criticism, but the fact remains that criticism is there and its removal would be helpful in the improvement of statutory require ments in the budgeting procedure. Chapter Summary The review of the literature and the interviews conducted pointed to the unsatisfactory interrelationship existing among the assessment calendar, budget calendar, and fiscal year. Several solutions were suggested which would result in changing one or more of the dates describing each of the three factors in the budgeting process. These suggestions are reported by category as follows: 1. Assessment calendar a. Change the date for completing the local and board rolls to the first part of June without changing the lien date. b. Change the date for completing the local and board rolls to the first part of May with or without changing the lien date. c. Change the lien date to the first day of January and the completion of the local and board rolls to the first part of June. d. Set the tax rate on the basis of the com pleted local and board rolls instead of the equalized roll. e. Enforce the requirement that all property be reassessed annually. Budget calendar a. Change the date for the adoption of a final budget from the first week of August to "on or before" June 30. b. Change the date for adoption of the tenta tive budget from before July 1 to before May 15. Fiscal year a. Change the beginning of the fiscal year to the first day of January for all public agencies. b. Change the beginning of the fiscal year to the first day of September for school dis tricts only. c. Change the tax collection schedule to provide for a quarterly collection of one- fourth of the total tax bill due each quarter. d. Provide for collection of taxes four times per year, the amount due each payment being the amount of taxes levied by one or more of the taxing agencies. In addition to the suggested solutions presented above, it was found that tax rate limitations were a major contributing factor to revenue problems faced by taxing agencies. In general, the opinions expressed by respond ents and authorities in the literature supported either the elimination of tax rate limits or at least an increase in the limits to a more realistic limit. A general lack of confidence in public school administrators and their abilities in budgeting practices was found to exist which tended to hinder outright support for changes resulting in increased local independence. CHAPTER V SUMMARY, SUMMARY OF FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS Summary Restatement of the problem The purpose of this study was to determine the best interrelationship among the assessment calendar, school budget calendar, and fiscal year which would facilitate administrative decision-making. More specifically, this study sought answers to the following questions: 1. What would be the most desirable assessment calendar? 2. what would be the most desirable school budget calendar? 3. What would be the most desirable fiscal year? Procedure A survey was made of the literature in the areas of school, municipal, and governmental finance. The materials 231 covered were books; publications of the government, pro fessional associations, and other organizations; periodi cals; unpublished materials; and statutory provisions. A narrative letter was sent to each head state educational officer in the forty-nine states outside of California requesting information concerning their proce dures and problems in the three areas under study. A 100 per cent return was received from the survey of the forty- nine states. The results of the survey were analyzed and reported in chapter II. Concurrent with the survey of the forty-nine states sponsorship was obtained from the California Association of Public School Business Officials. Because of the inter est of this association in finding a practical solution, the board of directors created a five-member committee, including the two authors, to aid in the study. A meeting was held with the committee to ascertain areas of concern and points of emphasis for inclusion in the study. Because of the political overtones inherent in the problem and the emotional involvement on the part of some members of some of the professions, it was decided that the interview technique for data collecting would be most appropriate. 233 Initially proposed respondents were selected by position only on the basis of concern with the problem and/or possible involvement in the accomplishment of change; if change were found to be necessary. After minor correc tions, the following list was approved by the doctoral committee. 1. Two county assessors recommended by the State Association of County Assessors of California 2. Two county auditors recommended by the County Auditors Association of California 3. Two city administrators recommended by the League of California Cities 4. Two county administrative officers recommended by the County Supervisors Association of California 5. Two school business officials recommended by the California Association of Public School Business Officials 6. Two professors of public school administration recognized as authorities in the field of school finance 7. Two professors of public administration recom- 234 mended by the dean of the School of Public Administration at the University of Southern California 8. The county assessor of Los Angeles County 9. The chairman of the State Assembly Committee on Municipal and County Government 10. The chairman of the State Senate Committee on Local Government 11. The chief of the Division of Public School Administration, State Department of Education 12. A member of the State Board of Equalization, representing the fourth district 13. A former county auditor of Los Angeles County j who was instrumental in proposing changes in the budgeting process to the state legislature in previous years 14. A director of research of the California Tax payers Association 15. The president of the California Association of Chamber of Commerce Executive Officers Anonymity as to what each said in the interview was guaranteed to each of the respondents to encourage candid 235 discussions in the interview situation. An interview guide was constructed after studying texts by Borg; Good, Barr, and Scates; Good; and Rummel (6, 16, 15, 23). A sample interview guide was then constructed and pilot interviews made with a county auditor, a city manager, a county manager, a county assessor, and a school business manager. After the pilot interviews were made, revisions were accomplished on the interview guides and presented to the chairman of the doctoral committee for approval. Contact was made by telephone with all of the selected respondents to establish an appointment for inter view. The telephone appointment was confirmed by letter i which delineated some background to the problem under study I and indicated the type of information to be requested from the respondent (Appendix C). After each interview was com pleted, the notes were reviewed, analyzed, and a summary of the interview session was typed. Upon receipt of responses from all of the forty- nine states outside of California, the state of Nevada was selected for further study. The basis for this selection was threefold in nature: 236 1. The state of Nevada had changed from a calendar year to a fiscal year in 1955 and could shed some light upon the reasons for changing and the problems inherent in making such a change. 2. The budgeting process in Nevada was such that a budget was adopted on the basis of known assessed valuation data and prior to the employment of staff and prior to the beginning of the fiscal year. 3. A new budget act had been adopted by the state legislature in 1965 which was proposed by a combined effort of the school business officials, county auditors, city managers, and county managers. It was expected that this could shed some light on how change could best be made in the legislative arena. The respondents to be interviewed in the state of Nevada were selected by contacting Dr. J. L. Glaspey, Assistant Superintendent--Business Services, Clark County School District, for recommendations. Upon his recommenda tions, appointments were made and interviews held with the following: 237 1. The county manager of Clark County 2. The chairman of the Assembly Ways and Means Committee 3. The president of the Sierra Nevada Power Company 4. The county assessor of Clark County 5. The city manager of Sparks, Nevada 6. The county auditor of Washoe County 7. The state assistant superintendent in charge of business affairs, State Department of Education, Nevada 8. The executive officer of the State of Nevada Tax Commission 9. The assistant superintendent— business services, Clark County Schools The same techniques were used in interviewing respondents in Nevada as were used in the state of Califor nia. Summary of Findings National study The following findings resulted from the survey of 238 the forty-nine states: 1. Twenty-one of the forty-nine states surveyed indicated dissatisfaction with some aspect of the present school budgeting procedure. 2. Twelve states indicated need for corrective action in the assessing procedure and/or assessment calendar. 3. Thirty-three states have a fiscal year begin ning date of July 1 for all school districts within the state, and an additional seven states use the July 1 date for a majority of districts, 4. Twenty-six states provide for adoption of a budget prior to the commencement of the fiscal | / year. 5. Twenty-three states provide for known assessed valuation data prior to final adoption of the budget. Nevada study General.— The following general findings resulted from the interviews with Nevada officials: 1. County school districts are the only school districts permitted in Nevada. 239 2. An aggregate property tax rate limitation of $5.00 per $100 of assessed valuation exists for all governmental agencies. 3. A seven-member state tax commission determines the distribution of the maximum $5.00 tax rate. 4. Property taxes are collected quarterly in Nevada. Assessment calendar.— The following findings per tain to the Nevada assessment calendar practices: 1. Assessed valuation data are known prior to the final adoption of governmental budgets. 2. Representatives of public agencies in Nevada expressed dissatisfaction with the length of time between the lien date and the beginning of the fiscal year. 3. Concern was expressed by those not responsible for budget construction that taxing agencies tend to increase budget appropriations to take advantage of assessed valuation increases when the assessed valuation is known prior to the adoption of budgets. 4. Efficiency in budget construction was generally 240 considered to be enhanced by having known assessed valuation data prior to budget adop tion. 5. Annual reassessment does not take place in Nevada although required by statute. Budget calendar.--The following findings pertain to the budget calendar practices in Nevada: 1. Adoption of a budget prior to the commencement of the fiscal year was considered to be basic to responsible governmental budgeting. 2. Some concern was expressed over the difficulty in estimating ending balances when the budget ! is adopted during the last week of April. 3. The use of a committee representing all interested state associations was considered to be an outstanding success in accomplishing a legislative change in the budget calendar. Fiscal year.— The following findings pertain to the fiscal year dates as practiced in Nevada: 1. Nevada changed from a calendar year to a fiscal year in 1955 to correct an unsatisfactory interrelationship among the assessment calendar, 241 budget calendar, and fiscal year. 2. Many complicated fiscal problems resulted from the change in the fiscal year. 3. Most respondents in Nevada recommended that changing the fiscal year not be considered if at all possible. California study General.— The following general findings resulted from the interviews with California officials: 1. There has been a long-standing concern over what constitutes the proper interrelationship among the assessment calendar, budget calendar, and fiscal year by all uaxing agencies. 2. Several attempts have been made to make legis lation changes in California which would affect one or more of the three factors under study without success. 3. No combined study of the problem nor combined effort to make changes has been attempted involving representation from all state pro fessional associations. 242 4. A general lack of confidence in public school administrators and school district governing boards in budgeting procedures was found to exist throughout the state of California. 5. The imposition of the present statutory tax rate limitation seemed to compound the problem of budget construction and adoption prior to the availability of known assessed valuation figures. Assessment calendar.— The following findings per tain to the California assessment calendar practices: 1. It was found that those not involved in the administration of taxing agencies were concemedj about the possibility of taxing agencies in creasing budgetary appropriations to take advantage of assessed valuation increases if the assessed valuation is presented to them prior to adoption of the budget. 2. The annual reassessment of taxable property would substantially reduce annual variation in assessed valuation. 3. The reassessment of fractional parts of a county each year was found to be the general practice. Los Angeles County subjects all property to an annual reassessment on a sales ratio basis. The equalization of the assessment roll typically resulted in less than 1 per cent change. Considerable evidence was found supporting the concept that valuation figures should be available prior to the adoption of the budget. Administrators of taxing agencies in general expressed a desire to have the assessment roll completed and released as early as possible but in any case no later than sometime between June 1 and June 15. Assessing officials in general expressed concern that the period of time between the lien date and the date for completing the roll be no less than at present and if possible that it be increased to allow more time to complete their work. The first day of January was most frequently 244 mentioned as the most desirable lien date. 10. The farming community would probably be the only group which would object to changing the lien date to the first day of January. Budget calendar.— The following findings pertain to the budget calendar practices in California: 1. There was very little disagreement with the concept that the adoption of a budget prior to the commencement of the fiscal year was an integral part of good budgetary practice. 2. Concern was expressed that the budget not be adopted too far in advance of the beginning of the fiscal year so that as many facts as possible can be collected prior to the adoption of the budget. 3. Some support was found for the adoption of at least a tentative budget prior to or juxta- positional to the reemployment of teachers on May 15. Fiscal year.— The following findings pertain to the fiscal year dates as practiced in California: 1. It was found that the majority of respondents 245 were apprehensive over the possibility of changing the fiscal year and in general did not support this as a good solution to the problem. 2. There was concern over the amount of time be tween the beginning of the fiscal year and the receipt of the first installment of taxes be cause expenditures during this period usually exceeded revenue. Conclusions From the findings, these conclusions were drawn: 1. The present interrelationship of the assessment calendar, school budget calendar, and fiscal year period in California is unsatisfactory for school districts, city governments, and county governments. 2. Revisions should be made for all three of the governmental agencies listed above. Recommendations The preceding investigation of the assessment calen dar, budget calendar, and fiscal year for school districts 246 in California resulted in the following recommendations: 1. It is recommended that the assessment calendar be changed so that all taxable property is assessed as of the first day of January with the local and state rolls to be completed and delivered to the county auditor on the first day of June. If use of computations in assess ment procedure proves to be successful in the future, March 1 would be more desirable. 2. It is recommended that the tax rate be computed on the basis of the completed roll rather than | the equalized roll. 3. It is recommended that the budget calendar for j i California school districts be changed to provide for the adoption of a tentative budget on or before May 15 and the holding of a public hearing and adoption of a final budget on or before June 30. 4. It is recommended that the fiscal year be left as it is now constituted with a commencement date of July 1. f 247 5. It is recommended that the school district tax rate limitations either be removed entirely or raised to match the present economy, including a provision for future changes to keep in step with current needs. 6. Further study of the possibility of quarterly tax collections is recommended. 7. It is recommended that further study be con sidered for determining how public school administrators can best improve their public image for budgeting. 4 BIB LI O GR A PH Y i BIBLIOGRAPHY Books 1. Assessment Principles. Chicago: international Association of Assessing Officers, 1960. 2. Assessment Principles and Terminology. 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The Michie Company, Charlottesville, Virginia, 1958. State of Alabama Department of Education Bulletin 1958, No. 5. 53. Public School Laws of the State of Alabama. Annotated 1963 Cumulative Supplement. Reprinted from 1963 Cumulative Pocket Parts to Code of Alabama, Recom piled, 1958. The Michie Company, Charlottesville, Virginia, 1964. State of Alabama Department of Education Bulletin 1964, No. 6. 54. Public School Laws of North Carolina. Including Amendments Adopted by the 1957, 1959, 1961, and 1963 General Assemblies as Printed in the General Statutes of North Carolina. Issued by Thad Eure, Secretary of State, The Michie Company, Charlottes ville, Virginia, July, 1963. 255 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. School Code and Other Nevada Laws Relating to Schools. Issued by Byron F. Stetler, Superintendent of Public Instruction, State Printing Office, Carson City, Nevada, 1961. School Code of Illinois. Circular Series A No. 155. Office of Superintendent of Public Instruction. State of Illinois, 1963. School Laws. Enacted by the Thirty-Seventh Session of the Idaho Legislature, 1963. Department of Education, Boise, Idaho. School Laws. Enacted by the Forty-Fourth General Assembly Second Regular Session, State of Colorado. Prepared by John A. Holden. Bradford-Robinson Printing Co., Denver, 1964. The School Laws of Alabama. Annotated. Issued by the State Board of Education. West Publishing Company, St. Paul, Minnesota. Michie Company and Harrison Company, 1941. School Laws of South Carolina, 1962. Reprint from the Code of Laws of South Carolina 1962. Issued by the State Department of Education. The Michie Company, Charlottesville, Virginia, 1962. Copyright 1962 by the State of South Carolina. School Laws of West Virginia. Rex M. Smith, State Superintendent of Schools. Reprinted from Michie's West Virginia Code of 1961 and 1962 Supplement, Copyright 1961, 1962 by the Michie Company. State of California. Constitution. Sacramento: California State Printing Office. ________ . Revenue and Taxation Code. Sacramento: California State Printing Office. ________ . Education Code. Sacramento: California State Printing Office, 1963. 256 65. 66. 67. 68. 69. 70. 71. 72. 73. State of Idaho Department of Education. House Bill No. 92 and Amendments, Chapter No. 13, Session Laws of 1963 Thirty-Seventh Session of the Idaho Legislature, 1963. 1963 Supplement to the State of Nevada School Code of 1961. Byron F. Stetler, State Superintendent of Public Instruction. Carson City, Nevada, 1963. Periodicals Appleton, W. B. "Upgrading Property Assessment," American School Board Journal, CXL (March, 1960), 26-27. Glaeser, Edward N. "County Financial Organizations," Municipal Finance, XXXVII, No. 2 (November, 1964), 89-95. Orlich, Donald C. "The Role of Property Taxes in Financing Public Schools, Part I," American School Board Journal, CLI, No. 5 (November, 1965), 10-12. Phillips, Miner B. "Budget Procedure in Pasadena," Municipal Finance, XIII, No. 3 (February, 1941), 19-22. "Recent Statewide Programs to Improve Local Assess ments," Proceedings. National Tax Association, 1951. "State-Local Fiscal Relations in California: A Summary Report," California State Chamber of Commerce, January, 1947. Ward, Connell C. "War Time School Budgeting," Municipal Finance, XV, No. 1 (August, 1942). 257 74. 75. 76. 77. Unpublished Materials Ferris, Robert E. "Statutory Controls Governing School District Taxation." Unpublished Doctor*s dissertation, University of Southern California, 1965. Lovik, Hugh Douglas. "Budget Procedures in California Unified School Districts." Unpublished Doctor's dissertation, University of Southern California, 1961. Swanson, Jess Nelson. "Equalization of Property Assessments.” Unpublished Doctor's dissertation. University of Southern California, 1961. Wright, Frank Moore. "Selected Policies and Proce dures in the Administration of California School District Budgets." Unpublished Doctor's disserta tion, University of Southern California, 1950. A P P E N D I C E S APPENDIX A LETTER TO STATE SUPERINTENDENTS OF PUBLIC INSTRUCTION OF THE FORTY-NINE STATES OUTSIDE OF CALIFORNIA AND FOLLOW-UP LETTERS NECESSARY TO RECEIVE 100 PER CENT RESPONSE COPY December 14, 1964 Dr. W. W. Deck State Superintendent of Public Instruction State Superintendent's Office Phoenix, Arizona Dear Doctor Deck: We wish to express our appreciation to you for your prompt and helpful response to the letter that we sent to you last February concerning our study of tax rate limi tations. That study is in its final stages and will be completed in the near future. We are presently involved in a study of what would constitute the most desirable relationship between the fiscal year, the school budget calendar, and the assess ment calendar as they relate to school budget preparation.| The United States Office of Education has advised us that Arizona has some unique practices and we therefore felt that your opinion would be of extreme relevance and impor tance to the study. Your comments and opinions concerning the legal requirements and practices in Arizona would be greatly appreciated. Perhaps a further description of the problems faced in California would be informative and helpful to you in answering our questions. The fiscal year in California commences on July 1 and ends on the next succeeding June 30, as is the case with most states. The school budget calendar established by California statutes prescribes the following schedule: 260 261 Dr. W. W. Deck Page 2 December 14, 1964 July 1 Each local governing board must submit a tentative budget to the county superintendent of schools for review. July 25-31 The tentative budget must be published in a newspaper of general circulation in the district. August 1-7 The local governing board must hold a public hearing and adopt a final budget. September 1 The county board of supervisors must set the tax rate necessary to finance the local district budget. The assessment calendar provides for the following schedule: 1st Monday in March 1st Monday in July 3rd Monday in August The assessed value of all real property is established as of this date. The assessed value of all local real property is certified to the county auditor. The assessed value of all pub lic utilities is certified by the state Board of Equalization, Specific problems and difficulties arise in the budget program because of the particular interrelationship exist ing between the three calendars. Examples of these prob lems are listed below. 262 Dr. W. W. Deck Page 3 December 14, 1964 1. The local district must operate in excess of one month before a final budget is adopted. 2. Many important decisions on staffing and salaries must be made in May when most teachers are avail able for employment— a date considerably ahead of known income information based on assessed values of property within the district. 3. Both the tentative and final budgets must be adopted by the local governing board prior to the knowledge of complete and final assessed values— the very base for the income of the local school district. The brief description of the problems faced in Cali fornia on this matter is far from complete, but we hope it does allude to the essence of our concern. We would like to pose some questions concerning the interrelation ships existing between fiscal year, assessment calendar, and school budget calendar in Arizona. To facilitate your j answering our letter, we are going to list our questions in an outline form. We realize that the procedure of budget preparation for financing school districts in Arizona may differ from California to such an extent that some of the questions may not be appropriate in their present form for your state. Therefore, you should feel free to answer the questions in any manner which is most meaningful. 1. How are the assessed values of real property established and what part do they play as a base for the support and development of school dis trict budgets in your state? Please indicate required deadline dates and who determines assessed values. 263 Dr. W. W. Deck Page 4 December 14, 1964 2. What are the legal deadline dates which must be followed by local school districts in construct ing their annual budgets? 3. What are the beginning and ending dates of your fiscal year? If this varies within the state, would you please explain. 4. if there has been a recent change in any of the assessment calendar, school budget calendar, or fiscal year dates, would you please indicate how recent the change was, a brief description of what the requirements and practices were before the change and give your opinion as to why the change was effected. 5. With reference to the relationship between the dates prescribed for the fiscal year, assessment calendar, and school budget calendar in your state: a. In your opinion is the relationship satisfac tory? b. If not, what changes would you recommend? c. What recommendations would you care to offer concerning this general problem? 6. If you feel that copies of existing statutes or constitutional law might be helpful in clarifying your answers to the above questions, we would be most grateful for the receipt of pertinent materials. 264 Dr. W. W. Deck Page 5 December 14, 1964 We realize the demands upon your time. However, this problem of the proper interrelationship between the fiscal year, assessment calendar, and school budget calendar is of great concern to us and your reply or your referral to an appropriate staff member will be sincerely appreciated. With this exchange of information, perhaps certain solu tions may be identified. If you desire additional infor mation about California, please let us know. Thank you very much for your cooperation in this endeavor. Sincerely yours, Leonard Grindstaff Riverside County Superintendent of Schools COPY COPY January 20, 1965 Dr. Cecil M. Shaw Superintendent of Public Instruction State Superintendent's Office Cheyenne, Wyoming Dear Doctor Shaw: On December 23, 1964, we sent you a letter posing questions regarding the practices, unique to your state, in the areas of assessment calendar, school budget calendar, and the fiscal year. In the event that the original letter was lost or misplaced in the Christmas rush, we are enclosing a copy to assist you in responding to our questions. Your participation is extremely important to the success of the study. If you feel the need for clarifi cation, please do not hesitate to contact us. Your cooperation and courteous attention to this matter is greatly appreciated. Sincerely yours, Leonard Grindstaff Riverside County Superintendent of Schools 265 COPY February 23, 1965 Dr. Lynn M. Bartlett Superintendent of Public Instruction State Superintendent's Office Lansing, Michigan Dear Doctor Bartlett: We have not received a reply to letters sent you on December 16, 1964 and January 15, 1965 regarding the practices, unique in your state, in the areas of assess ment calendar, school budget calendar, and the fiscal year. We are enclosing copies of the original letters to assist you in responding to our questions. We realize you are extremely busy, but because of the importance of the participation of your state in the study, perhaps you could refer the matter to an appro priate staff member. Your cooperation and courteous attention to this matter is greatly appreciated. Sincerely yours, Leonard Grindstaff Riverside County Superintendent of Schools 266 COPY April 14, 1965 Dr. Paul R. Fillian Chief of Administration State Commissioner's Office Concord, New Hampshire 03301 Dear Doctor Fillian: We have sent three letters to Doctor Farnura regarding the practices unique to your state in the areas of assessment calendar, school budget calendar, and the fiscal year. We have not received a reply to the letters, and because of the importance of the participation of your state in the study, we are requesting your assist ance in this matter. We are enclosing copies of the original letters to aid you in responding to our questions. We hold Doctor Farnum in the highest regard. Realiz ing he has a very heavy responsibility, we felt it would be proper to contact you directly. Your cooperation and courteous attention to this matter is greatly appreciated. Sincerely yours, Leonard Grindstaff Riverside County Superintendent of Schools 267 APPENDIX B LETTER TO STATE ASSOCIATION PRESIDENTS REQUESTING RECOMMENDATION OF TWO REPRESENTATIVES OF THEIR PARTICULAR PROFESSION COPY May 7, 1965 Mr. Ernest T. Johnson, President County Auditors Association of California Office of Auditor-Controller of Siskiyou County P. 0. Box 8 Yreka, California Dear Mr. Johnson: We are presently involved in a study of what would constitute the most desirable relationship between the fiscal year, the school budget calendar, and the assess ment calendar as they relate to public school budget preparation. A part of the study involves the interview ing of leaders in the various professions related to the financing of public education in California. We are writing to you to request your recommendation of two county auditors whom you consider as outstanding members of the profession. Perhaps a further description of the problems faced by school districts in California would be informative and helpful to you in making your selection. As you know, the fiscal year in California commences on July 1 and ends on the next succeeding June 30, as is the case with most states. The school budget calendar established by Cali fornia statutes prescribes the following schedule: July 1 Each local governing board must submit a tentative budget to the county superintendent of schools for review. July 25-31 The tentative budget must be published in a newspaper of general circulation in the district. 269 270 -2- To: Mr. Ernest T. Johnson May 1, 1965 August 1-7 The local governing board must hold a public hearing and adopt a final budget. September 1 The county board of supervisors must set the tax rate necessary to finance the local district budget. The assessment calendar provides for the following schedule: 1st Monday in March The assessed value of all real property is established as of this date. 3rd Monday in July The assessed value of all local real property is certified to the county auditor. 3rd Monday in August The assessed value of all public utilities is certified by the State Board of Equaliza tion. Specific problems and difficulties arise in the budget program because of the particular interrelationship between the three calendars. Examples of these problems are listed below. 1. The local district must operate in excess of one month before a final budget is adopted. 2. Many important decisions on staffing and salaries must be made in May when most teachers are avail able for employment— a date considerably ahead of known income information based on assessed values of property within the district. 271 -3- To: Mr. Ernest T. Johnson May 7, 1965 3. Both the tentative and final budgets must be adopted by the local governing board prior to the knowledge of complete and final assessed values— the very base for the income of the local school district. The brief description of the problems faced by school districts in California on this matter is far from com plete, but we hope it does allude to the essence of our concern. It would be very much appreciated if you would contact the two county auditors you have selected, indicating that we will be writing to them for an interview in the near future. We are enclosing herewith two copies of this letter in the event you wish to forward them for informa tional purposes. We realize the demands upon your time. However, this problem of the proper interrelationship between the fiscal I year, assessment calendar, and school budget calendar is I of great concern to school districts. With this exchange of information, perhaps certain solutions may be identi fied. Thank you very much for your cooperation in this endeavor. Sincerely yours, John E. Perko William M. Purdy COPY APPENDIX C LETTER SENT TO RESPONDENTS AS A FOLLOW-UP TO TELEPHONE APPOINTMENTS IN CALIFORNIA STUDY COPY August 11, 1965 The Honorable John T. Knox 207 Thirty-Seventh Street Richmond, California My dear Mr. Knox: This letter will confirm our telephone conversation held on August 10, 1965, during which an appointment was made for Mr. John Perko, Assistant Superintendent of the Alvord Unified School District, and me to interview you at 11:00 a.m. on Thursday, August 26, 1965. As was indicated we are presently involved in the study of what would constitute the most desirable relationship between the fiscal year, the school budget calendar, and the assessment calendar as they relate to public school budget preparation, a part of the study involves the interviewing of leaders in the various professions related to the financing of public education in California. As I the Chairman of the Assembly Municipal and County Govern- 1 ment Committee, we believe that you can give us very valuable information and guidance from the legislative point of view. Perhaps a further description of the problems faced by school districts in California would be informative and helpful to you in answering our questions during the interview. As you well know the fiscal year in California commences on July 1 and ends on the next succeeding June 30. The school budget calendar established by California statutes prescribes the following schedule: 273 274 Page 2 The Honorable John T. Knox August 11, 1965 July 1 Each local governing board must submit a tentative budget to the county superintendent of schools for review. July 25-31 The tentative budget must be published in a newspaper of general circulation in the district. August 1-7 September 1 The local governing board must hold a public hearing and adopt a final budget. The county board of supervisors must set the tax rate to finance the local school dis trict budget. The assessment calendar provides for the following schedule; 1st Monday in March The assessed value of all real property is established as of this date. 3rd Monday in July The assessed value of all local real property is certified to the county auditor. 3rd Monday in August The assessed value of all pub lic utilities is certified by the State Board of Equalization Specific problems and difficulties arise in the budget program because of the particular interrelationship between the three calendars. Examples of these problems are listed below: Page 3 The Honorable John T. Knox 275 August 11, 1965 1. The local district must operate in excess of one month before a final budget is adopted. 2. Many important decisions on staffing and salaries must be made in May when most teachers are avail able for employment— a date considerably ahead of known income information based on assessed values of property within the district. 3. Both the tentative and final budgets must be adopted by the local governing board prior to the knowledge of complete and final assessed values— the very base for the income of the local school district. The brief description of the problems faced in California on this matter is far from complete, but we hope it does allude to the essence of our concern. We shall be posing questions to you concerning primarily an evaluation of our present schedule of tax collection, property valuation, budget preparation, etc. We would also be interested in learning any suggestions for change which you may have in mind and your ideas concerning the procedure which we might follow in bringing about suggested changes to our present system. We realize the demands upon your time and, therefore, appreciate greatly your taking time to discuss these mat ters with us. The problems of the proper interrelation ship between the fiscal year, assessment calendar, and school budget calendar is of great concern to school dis tricts as well as other public agencies in California. Thank you very much for your cooperation in this endeavor. Sincerely, WMP: c William M. Purdy COPY APPENDIX D LETTERS SENT TO RESPONDENTS AS A FOLLOW-UP TO TELEPHONE APPOINTMENTS IN NEVADA STUDY COPY July 1, 1965 Mr. Robert Lawless, Executive Secretary Nevada Tax Commission Carson City, Nevada Dear Mr. Lawless: This letter will confirm our telephone conversation held on July 1 during which an appointment was made to inter view you at 1:30 P.M. on July 9. As was indicated, we are presently involved in a study of what would constitute the most desirable relationship between the fiscal year, the school budget calendar, and the assessment calendar as they relate to public school budget preparation. After analyzing the results of a survey of the fifty states, Nevada was selected for comparative study because your state evidenced desirable practices. Dr. J. L. Glaspey, Assistant Superintendent in Charge of Business Services for the Clark County Schools, recommended you and other public leaders in Nevada whom he thought would be able to give us help in our study. Perhaps a further description of the problems faced in California would be informative and helpful to you in answering our questions. The fiscal year in California commences on July 1 and ends on the next succeeding June 30, as is the case with most states. The school budget calendar established by California statutes prescribes the following schedule: July 1 Each local governing board must submit a tentative budget to the county superintendent of schools for review. 277 Mr. Robert Lawless Page 2 278 July 1, 1965 July 25-31 The tentative budget must be published in a newspaper of general circulation in the district. August 1-7 The local governing board must hold a public hearing and adopt a final budget. September 1 The county board of supervisors must set the tax rate necessary to finance the local district budget. The assessment calendar provides for the following schedule: 1st Monday in March The assessed value of all real property is established as of this date. 3rd Monday in July 3rd Monday in August The assessed value of all local real property is certified to the county auditor. The assessed value of all public utilities is certified by the State Board of Equali zation. Specific problems and difficulties arise in the budget program because of the particular interrelationship be tween the three calendars. Examples of these problems are listed below: 1. The local district must operate in excess of one month before a final budget is adopted. Mr. Robert Lawless Page 3 279 July 1, 1965 2. Many important decisions on staffing and salaries must be made in May when most teachers are avail able for employment— a date considerably ahead of known income information based on assessed values of property within the district. 3. Both the tentative and final budgets must be adopted by the local governing board prior to the knowledge of complete and final assessed values— the very base for the income of the local school district. The brief description of the problems faced in California on this matter is far from complete, but we hope it does allude to the essence of our concern— We shall be posing questions to you concerning primarily an evaluation of your present schedule of tax collection, property valua tion, budget preparation, etc. We would also be interest ed in learning what principles in general should be applied to the administration of these three areas of public financing and any suggestions or recommendations that you would make for change in Nevada*s present schedule. We realize the demands upon your time. However, this problem of the proper interrelationships between the fiscal year, assessment calendar, and school budget calen dar is of great concern to school districts and other public agencies in California. Thank you very much for your cooperation in this endeavor. Sincerely, William M. Purdy WMP:c John E. Perko COPY APPENDIX E INTERVIEW GUIDE USED IN THE STATE OF CALIFORNIA INTERVIEW GUIDE FOR CALIFORNIA 1. In your opinion what relationship should exist between the budget calendar and the fiscal year? Consider each of the following areas in your discussion: a. Estimation of revenue and ending balances b. Estimation of expenditures c. Expenditure of funds included in the new budget d. The instigation of new programs e. The employment of staff f. Major Capital Outlay or maintenance expenditures 2. What considerations should be given to the establish- , | ment of a fiscal year for all public agencies and for the agency you represent, if any? If a change in the present fiscal year is indicated, how should this be financed the year of change over? 3. In your opinion what relationship should the assess ment calendar have to the budgeting process? Consider each of the following areas in your discussion: 281 282 a. Lien date b. Date for completion of the roll c. Span of time needed for the assessing process d. The estimation of assessed valuations in general and as required in Education Code section 20811 e. Annual reassessment of all property f. Tax rate limitations g. The advantages and/or disadvantages in having the assessed valuation known to a taxing agency prior to the time that agency adopts its budget 4. In summary, what criteria and recommendations would you suggest in determining the proper interrelation ships among the periods of time described by the assessment calendar, budget calendar, and fiscal year? « APPENDIX F INTERVIEW GUIDE USED IN THE STATE OF NEVADA INTERVIEW GUIDE FOR NEVADA Discuss the advantages and disadvantages of the relationship between the budget calendar and fiscal year as it has been in operation in recent years. Consider each of the following areas in your dis cussion : a. Estimation of revenue and ending balances b. Estimation of expenditures c. The instigation of new programs d. The employment of staff e. Major Capital Outlay or maintenance expenditures We note that a new budget calendar was recently enacted into law by the state legislature. What advantages and/or disadvantages do you anticipate resulting from this new law? In 1956 Nevada changed from a fiscal year commencing on the first day of January to one commencing on the first day of July. If you have any first-hand knowledge of the reasons for the change and the prob lems experienced would you please discuss? 285 4. Please discuss and evaluate the relationship existing between the assessment calendar and the budgeting process. Consider the following areas in your dis cussion: a. Lien date b. Date for completion of the roll c. Span of time granted for the completion of the roll d. Annual reassessment of all property e. Tax rate limitations f. The advantages and/or disadvantages in having the assessed valuation known to a taxing agency prior to the time that agency adopts its budget 5. We would appreciate your comments regarding the methods used in accomplishing the recent changes in the budget calendar.

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