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PHM CFO: SEA 1 and assessed-value swings complicate levy strategy; referendum may be required to expand operating revenue
Summary
CFO Zach Wyatt told trustees that SEA 1 property tax changes, an unexpected 7.6% assessed-value increase and statutory caps make levy planning complex; operations growth beyond the statutory MLGQ may require a referendum while debt-service increases are constrained differently.
CFO Zach Wyatt walked the Penn-Harris-Madison board through how assessed-value changes and state law affect levy and rate decisions for 2027.
Wyatt said the district initially budgeted for a 4% drop in assessed value but instead saw a 7.6% increase because tax tables were reset; that arithmetic drove a reported drop in the district's tax rate even as assessed value rose. He emphasized the difference between levy dollars and tax rate: a higher advertised rate provides flexibility to capture revenue depending on final certified assessed values.
Wyatt described legal constraints under SEA 1 and the max-levy growth quotient (MLGQ): "To capture more operating revenue, it would require to go outside of the max levy growth quotient, which would require referendum to go beyond those dollars," he said. He noted the MLGQ for operations increased from 4% to 6% effective 01/01/2027 and that some revenue shifts (local income and vehicle excise taxes) can be directed to operations under a board resolution.
Board members pressed why the advertised rate (1.293 in the Form 3) differs from historical target rates (~0.9275). Wyatt said the advertised rate is intentionally high to provide flexibility until assessed values are certified and that the district has legal room to change rates, subject to statutory caps and referendum rules. Trustees asked the administration to return with more targeted options for levy and transfer strategies before the adoption vote.
