Optional 2020 Tax Settlement Extension
By Wisconsin School Administrators Alliance staff | May 1, 2020
In case you missed it, we are posting this important information from the DPI School Financial Services (SFS) Team regarding the optional 2020 tax settlement extension created in the recent state COVID-19 legislation.
From DPI SFS Team . . .
A non-statutory provision in the state COVID-19 response bill gives counties the option of waiving penalties for late 2020 property tax payments through October 1, 2020. If a county board adopts a resolution to do so, the August 20 tax settlement will include taxes collected through the end of July, and then a new final tax settlement will occur on September 20.
Barring another change in law, this is a one-time provision in effect for calendar year 2020 only. The statutory August 20 final settlement date would resume in 2021. We strongly recommend districts follow up with county officials and review their summer and fall cash flow to determine what impact a one-month delay in final tax settlements would have.
Due to revenue limits and state aids, DPI is requiring that September 20, 2020 tax settlements be reported as 2019-20 property tax revenue in the PI-1505 Annual Report.
Generally Accepted Accounting Principles (GAAP) require property taxes to be recognized as revenue in the period they are levied for, which must be collected during the fiscal year or within 60 days of year-end. In a county that waives penalties and has a September 20, 2020 final tax settlement, each district’s revenue from that settlement will be outside of that 60-day period.
GAAP allows a district to temporarily use a period greater than 60 days, if the circumstances are unusual and the facts justify doing so. The period used and related facts must be properly disclosed in the financial statements. This would not be considered to be a change in accounting policy and the district must resume use of the standard 60-day period in the following year.
Otherwise, if a district with a September 20, 2020 final tax settlement continues to use the standard 60-day period, revenue from that settlement will be recorded in its fiscal year 2020-21 audited financial statements, and both the 2019-20 and 2020-21 statements will report a GAAP-to-regulatory difference in property tax revenues.
The SFS Team strongly recommends that districts in counties with September 20, 2020 final settlements elect a 90-day collection period for property tax revenues in 2019-20, due to the unusual circumstances of COVID-19.
This would:
- Provide consistent application of governmental fund revenue recognition year over year.
- Align audited financial statements with 2019-20 budget expectations.
- Allow audited financial statements and the PI-1505 Annual Report to match.
We recommend that districts and auditors communicate on this matter and make decisions timely, so as not to delay any audit work.
Topics: SAA Capitol Reports, SAA Capitol Reports with Email Notifications, SAA Latest Update | No Comments »
Notices of Reasonable Assurance and Unemployment Benefits
By Wisconsin School Administrators Alliance staff | May 1, 2020
From the Legal Side…
In its most recent School Law FYI, the BoardmanClark Law Firm focuses on school district notices of reasonable assurance for academic year employees and issues surrounding unemployment benefits.
The SAA regularly receives these legal updates and we believe this is valuable information for SAA members. We are distributing this update to SAA members with the permission of the BoardmanClark Law Firm. The information in this update is no substitute for consulting with your district legal counsel, and we encourage you to do so.
Topics: SAA Capitol Reports, SAA Capitol Reports with Email Notifications, SAA Latest Update, SAA Legal Side | No Comments »
Pecatonica Tells Their Story
By Wisconsin School Administrators Alliance staff | May 1, 2020
Jill Underly, Superintendent for the Pecatonica School District, has sent a letter to the district’s legislators “telling their story” about providing services to their students during the COVID-19 crisis. Hats off to Jill and her Team at Pecatonica!
Keep the letters coming folks.
Topics: SAA Capitol Reports, SAA Capitol Reports with Email Notifications, SAA Latest Update | No Comments »
Budgetary Issues Nationwide
By Wisconsin School Administrators Alliance staff | April 30, 2020
From The Wheeler Report . . .
According to a report released by the Center on Budget and Policy Priorities, state budget shortfalls from the pandemic could total $650 billion over three years. The estimate is based on economic projections from the Congressional Budget Office (CBO) and new updated projections released by Goldman Sachs. The Center’s early estimates show state shortfalls will reach about 10% in the current fiscal year, which ends on June 30 for most states), and as high as 25% in FY2021.
The CBO projections state that unemployment will average 15% for the second and third quarters of 2020. The 15% in the second and third quarters of 2020 results from a projected loss of nearly 27 million unemployed and the exit of 8 million people from the labor force.
While the unemployment rate, defined as the number of jobless people who are available for and seeking work, is expected to remain high, the labor participation rate is expected to decrease. The labor participation rate is the “percentage of people in the civilian noninstitutionalized population who are at least 16 years old and who are either working or seeking work.” The CBO projects the labor participated rate will decline from 64.2% in the first quarter to 59.85 in the third quarter.
The CBO projects the labor market will improve after the third quarter, “with a rebound in hiring and a significant reduction in furloughs as the degree of social distancing diminishes.” The CBO says the unemployment rate is projected to decline from the 15% to 9.5% by the end of 2021.
Topics: SAA Capitol Reports, SAA Capitol Reports with Email Notifications, SAA Latest Update | No Comments »
Elmbrook “Tells Their Story” to Legislators
By Wisconsin School Administrators Alliance staff | April 30, 2020
Mark Hansen, Superintendent for the Elmbrook School District, has sent a letter to the district’s legislators “telling their story” about how they are serving their students during the COVID-19 crisis. Hats off to Mark and his Team at Elmbrook!
The SAA encourages other districts to tell their stories to their legislators as well. Forward those letters to the SAA and we will keep posting them.
Topics: SAA Capitol Reports, SAA Capitol Reports with Email Notifications, SAA Latest Update | No Comments »