Revenues
Revenue Line Items
The Town’s budget contains an estimate of all monies received from any source. The following is an explanation of the primary revenue line items.
Levy Limit: A levy limit is one of two types of levy (tax) restrictions. It states that the real and personal property taxes imposed by a city or town may only grow each year by 2 ½ percent of the prior year’s levy limit, plus new growth and any overrides or exclusions. The levy limit can exceed the levy ceiling only if the community passes a capital expenditure exclusion, debt exclusion, or special exclusion.
Levy Ceiling (Allowable Increase): The levy ceiling states that, in any year, the real and personal property taxes imposed may not exceed 2 ½ percent of the total full and fair cash value of all taxable property.
New Construction (Growth): The additional tax revenue generated by new construction, renovations and other increases in the property tax base during a calendar year. It does not include value increases caused by normal market forces or by revaluations. New growth is calculated by multiplying the assessed value associated with new construction, renovations and other increases by the prior year tax rate. The additional tax revenue is then incorporated into the calculation of the next year’s levy limit.
Override: A vote by the community at an election to permanently increase the levy limit.
Excludable Debt: An action taken by a community through a referendum vote to raise funds necessary to pay debt service costs for a particular project from the property tax levy, but outside the limits under Prop. 2 ½, by approving a debt exclusion, a community calculates its annual levy limit under Prop. 2 ½, then adds the excluded debt service cost. The amount is added to the levy limit for the life of the debt only and may increase the levy above the levy ceiling.
Reserved Bond Premium: Additions to the levy limit for a Prop 21/2 debt exclusion are restricted to the true interest cost incurred to finance the excluded project. A premium will occur when the bond’s stated interest rate is set higher than the true interest cost (the market rate).
Cherry Sheet Reimbursements: Includes items such as Police Career Incentives, State-Owned Land, Veterans Benefits, and Public Library subsidies.
Local Receipts: Locally generated revenues, other than real and personal property taxes. Examples include motor vehicle excise, investment income, fees, rentals and charges.
Local Aid: Revenue allocated by the Commonwealth to cities, towns, and regional school districts. Estimates of local aid are transmitted to cities, towns, and districts by the “Cherry Sheets.”
School Debt Reimbursement: State program that reimbursed cities, towns, and regional school districts varying percentages of their school construction costs.
Charter School Reimbursement: A component of Chapter 70 state aid provided to a municipality for public education.
School Choice Aid: Provided to a municipality for public education from a sending district under school choice.
Pension Reserve Fund: Pension Reserve Fund enables a community to set aside funds to absorb future assessment increases.
Enterprise Funds: A separate accounting and financial mechanism for municipal services for which a fee is charged for goods or services. Enterprise funds allow surpluses to be used to reduce fees for the services or to pay for capital improvements. Ashland has three Enterprise Funds: Water, Sewer, and Trash.
Community Preservation Funds: A special revenue fund established to receive all monies to support a community preservation program including but not limited to, tax surcharge receipts, proceeds from borrowings, and proceeds form the sale of certain real estate. Community Preservation funds may only be used for expenditures related to the following types of projects: Affordable housing; open space; recreation; and historical preservation.
Free Cash: Remaining, unrestricted funds from operations of the previous year. Unpaid property taxes reduce the amount that can be certified as free cash. Free cash is certified by the State Bureau of Accounts and is not available for appropriation until certified.
Stabilization Fund: A fund designed to accumulate amounts for capital and other future spending purposes, although it may be appropriated for any lawful purpose. A 2/3 vote of ton meeting is required to establish, amend the purpose of, or appropriate money from the stabilization fund.
The Town’s budget contains an estimate of all monies received from any source. The following is an explanation of the primary revenue line items.
Levy Limit: A levy limit is one of two types of levy (tax) restrictions. It states that the real and personal property taxes imposed by a city or town may only grow each year by 2 ½ percent of the prior year’s levy limit, plus new growth and any overrides or exclusions. The levy limit can exceed the levy ceiling only if the community passes a capital expenditure exclusion, debt exclusion, or special exclusion.
Levy Ceiling (Allowable Increase): The levy ceiling states that, in any year, the real and personal property taxes imposed may not exceed 2 ½ percent of the total full and fair cash value of all taxable property.
New Construction (Growth): The additional tax revenue generated by new construction, renovations and other increases in the property tax base during a calendar year. It does not include value increases caused by normal market forces or by revaluations. New growth is calculated by multiplying the assessed value associated with new construction, renovations and other increases by the prior year tax rate. The additional tax revenue is then incorporated into the calculation of the next year’s levy limit.
Override: A vote by the community at an election to permanently increase the levy limit.
Excludable Debt: An action taken by a community through a referendum vote to raise funds necessary to pay debt service costs for a particular project from the property tax levy, but outside the limits under Prop. 2 ½, by approving a debt exclusion, a community calculates its annual levy limit under Prop. 2 ½, then adds the excluded debt service cost. The amount is added to the levy limit for the life of the debt only and may increase the levy above the levy ceiling.
Reserved Bond Premium: Additions to the levy limit for a Prop 21/2 debt exclusion are restricted to the true interest cost incurred to finance the excluded project. A premium will occur when the bond’s stated interest rate is set higher than the true interest cost (the market rate).
Cherry Sheet Reimbursements: Includes items such as Police Career Incentives, State-Owned Land, Veterans Benefits, and Public Library subsidies.
Local Receipts: Locally generated revenues, other than real and personal property taxes. Examples include motor vehicle excise, investment income, fees, rentals and charges.
Local Aid: Revenue allocated by the Commonwealth to cities, towns, and regional school districts. Estimates of local aid are transmitted to cities, towns, and districts by the “Cherry Sheets.”
School Debt Reimbursement: State program that reimbursed cities, towns, and regional school districts varying percentages of their school construction costs.
Charter School Reimbursement: A component of Chapter 70 state aid provided to a municipality for public education.
School Choice Aid: Provided to a municipality for public education from a sending district under school choice.
Pension Reserve Fund: Pension Reserve Fund enables a community to set aside funds to absorb future assessment increases.
Enterprise Funds: A separate accounting and financial mechanism for municipal services for which a fee is charged for goods or services. Enterprise funds allow surpluses to be used to reduce fees for the services or to pay for capital improvements. Ashland has three Enterprise Funds: Water, Sewer, and Trash.
Community Preservation Funds: A special revenue fund established to receive all monies to support a community preservation program including but not limited to, tax surcharge receipts, proceeds from borrowings, and proceeds form the sale of certain real estate. Community Preservation funds may only be used for expenditures related to the following types of projects: Affordable housing; open space; recreation; and historical preservation.
Free Cash: Remaining, unrestricted funds from operations of the previous year. Unpaid property taxes reduce the amount that can be certified as free cash. Free cash is certified by the State Bureau of Accounts and is not available for appropriation until certified.
Stabilization Fund: A fund designed to accumulate amounts for capital and other future spending purposes, although it may be appropriated for any lawful purpose. A 2/3 vote of ton meeting is required to establish, amend the purpose of, or appropriate money from the stabilization fund.