Hi Next Gen'ers,
Happy Friday! It's another exciting February Friday with lots of things going on, including some AEL talks by the water cooler.
Non-Levy overrides were semi-popular before 2010, when the Impact Aid Fund was created. Impact Aid Districts used them to get Budget Authority for the cash coming in from Impact Aid. However, in 2018, the calculation for tax rates changed, and now some Districts have cash beyond their Budget Capacity. If the AEL is implemented, it will strip away Budget Capacity from all Districts, but the cash will still be there. Non-Levy Overrides can give back up to 25% and are exempt from the AEL Calculation.
This is a more traditional option for adding budget capacity to excess cash, offering protection from the AEL for 7 years. It's also a great way to get the community used to voting yes for overrides, since it won't cost them more than they've already given.
This strategy requires a long-term approach, without offering an immediate fix. The implementation would take two years, and there may be difficulty weathering the storm if another statewide fix isn't implemented.
The ability to implement non-levy overrides is clearly spelled out in 15-481. It's a low-risk strategy, but the two-year delay before seeing a return makes it low reward.
Districts that don't currently have an override and are using additional solutions to address the short term would benefit from this strategy. If a District doesn't have an override, this is a great protection approach that they should have implemented two years ago, but the next best time is now.
Feel free to run any of these loopholes by your legal counsel or auditor and feedback on why the logic isn't sound is always welcome.
Still haven't heard a strategy that's right for you? Don't worry, more options will be available on Monday. Have a great weekend everyone!
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