| Appropriation |
An appropriation is an authorization for expenditure of funds
for a specified purpose. |
| Assessed Valuation |
The assessed value of property is
determined by the Board of Assessors, and under state law must
be 100% of the full and fair market value, “the price
paid by a willing buyer to a willing seller in an open market
sale free from pressure or coercion.” Assessments are
adjusted annually based on valid sales for the previous year,
and revaluations are done every three years. See tax
rate. |
| Available Funds |
See free cash, |
| Bond Rating |
A bond rating is the measure of the quality and safety of
a bond. It indicates the likelihood that a debt issuer will
be able to meet scheduled repayments, and dictates the interest
rate paid. “AAA” is the best possible rating, and
“D” is the worst. In 2002, when Harvard issued short-term
debt, Standard and Poor’s maintained the town’s
“AA-” rating. |
| Caucus |
See town caucus. |
| Cherry Sheet |
The cherry sheet (so named because it was originally printed
on pink paper) is an annual statement from the Massachusetts
Department of Revenue detailing estimated reimbursements, state
aid, and assessments to the town. The town cannot set its tax
rate until it has received the cherry sheet. |
| Citizen Petition |
Ten citizens for an annual town meeting
or 100 citizens for a special town meeting may submit a petition
requesting that a specific article be included in the next town
meeting warrant. |
| Community Preservation Act (CPA) |
The CPA was established by the state in 2000 to permit communities
to levy a property tax surcharge of up to three percent for
the purpose of creating a local community preservation fund
which qualifies for matching state funds. CPA funds can be used
to acquire and protect open space, preserve historic buildings
and landscapes, and create and maintain affordable housing.
Annually, at least ten percent of the funds must be used for
each of these purposes; the remaining 70 percent may be allocated
among the three areas or may be set aside for future spending.
Harvard voted to adopt the CPA in 2001, and the surcharge amount
was set at 1.1%. |
| Debt Exclusion |
Voters can exclude certain debt from the Proposition 2 1/2
levy limit. To exclude debt service payments for a specific
capital project requires a 2/3’s vote at town meeting
and a majority vote at the subsequent town election. The amount
of each year’s payment (principal and interest) is added
to the levy limit for the life of the debt but does not increase
the base for the calculation of subsequent year’s levys. |
| Fiscal Year |
Harvard’s fiscal year starts on July 1 and ends on June
30. |
| Free Cash |
Free cash is the funds remaining from
individual line items in the previous year’s budget, plus
any revenue in excess of budget, less any unpaid back taxes.
The amount of free cash is certified each year by the State
Department of Revenue before becoming available to the town. |
| General Fund |
All monies taken in and paid out by the town go into the general
fund, which can be expended only by town meeting appropriation.
Exceptions include the conservation fund, revolving
funds, and gifts made to the library through its trustrees. |
| Levy |
See tax levy. |
| Local Receipts |
Local receipts include income derived by the town from motor
vehicle excise taxes, transfer station fees, licenses and permits,
and penalties/interest on taxes. |
| Long-Term Debt |
Long-term debt refers to the outstanding balance, at any given
time, on amounts borrowed with a maturity date of more than
one year. |
| New Growth |
New growth refers to the additional tax revenue generated
by new construction and property improvements during a calendar
year. New growth is calculated by multiplying the assessed
value of the new construction/renovations by the prior fiscal
year’s tax rate. This additional tax revenue is then
incorporated into the calculation of the current fiscal year’s
levy limit. |
| Omnibus Budget |
For convenience, all recommended appropriations for the operating
expenses of the town are grouped together in one warrant article.
This article is called the omnibus budget. The period covered
by the omnibus budget is the upcoming fiscal year, and budgeted
money not spent during that period reverts to free cash. |
| Overlay |
In computing the required property tax revenue each year,
the Board of Assessors must add a sum, called the overlay, to
offset the estimated amount of tax abatements and exemptions.
The overlay must not exceed five percent of total appropriations.
After all taxes for a year have been paid or abated, the unused
overlay balance is held in an account called the overlay surplus.
The overlay surplus may be held for the following year’s
overlay, or town meeting may vote to transfer some or all of
it to the reserve fund. |
| Override |
An override is a vote to increase the tax levy limit allowed
under Proposition 2 1/2. In order to pass an override, the question
must pass by a majority vote at town meeting and at the town
election. If passed, the override amount permanently increases
the base amount used to calculate the subsequent year’s
limit. |
| Proposition 2 1/2 |
Proposition 2 1/2 is state legislation,
adopted in 1980, that limits cities and towns to the amount
of property tax they may levy without an override vote. This
limits the tax increase to be no more than 2 1/2 percent of
the previous year’s tax plus the yield on new construction. |
| Reserve Fund |
The reserve fund is established at each
annual town meeting to cover extraordinary or unforeseen expenses
during the fiscal year. Transfers from this fund may be authorized
by the Finance Committee without a town meeting vote. |
| Revolving Fund |
A revolving fund may be set up for
a specific purpose, and money collected for that purpose is
used in turn to support it. For example, monies collected for
school lunches directly offset the cost of the program. Revolving
funds are administered by their sponsoring departments and are
not restricted by town meeting. |
| Short-Term Debt |
Short-term debt refers to the outstanding balance, at any
given time, on amounts borrowed with a maturity date of one
year or less. |
| Special Town Meeting |
Special town meetings may be called by the Board of Selectmen
or by citizen petition to conduct business
between annual town meetings. |
| Stabilization Fund |
The stabilization fund is a special account created to provide
a reserve for municipal expenditures and/or capital projects.
A 2/3’s vote of town meeting is required to transfer money
to or from the fund. |
| Tax Levy |
The tax levy is the amount of money the
town raises through the property tax. The levy can be any amount
up to the levy limit which is re-established each year in accordance
with Proposition 2 1/2. |
| Tax Levy Limit |
The annual increase in the tax levy
may not exceed 2 1/2% of the previous year’s levy plus
the tax value of new construction, adjusted for debt exclusion(s)
and override(s). |
| Tax Rate |
The tax rate for a given fiscal year equals the current
tax levy divided by the total assessed valuation as of the
previous January 1.
The rate is expressed as the amount of property tax revenue
that is due for every $1000 of assessed value. Harvard’s
residential tax rate in fiscal 2003 was $11.45 per $1000;
therefore a resident with a home assessed at $300,000 owed
$11.45 times 300, or $3,435.
|
| Total Assessed Valuation |
See assessed valuation. The total
of all assessed properties is used to calculate the tax rate. |
| Town Caucus |
Town caucus is a meeting of registered
voters called annually to nominate candidates for each elective
local office. In Harvard, caucus is held in February, approximately
seven weeks before local elections. |
| Town Meeting |
Town meeting is the legislative branch of local government.
At town meetings, registered voters conduct the business of
governing Harvard, including making laws and authorizing expenditures. |
| Town Report |
The town report is a printed, comprehensive record of all
town activities for a given year. |
| Transfer |
Funds that are authorized for a given omnibus budget line
item or warrant article can only be spent for that purpose.
However, a town meeting vote can transfer money from one line
item to another, or from a warrant article or from free
cash to a budget line item or another warrant article. |
| Voter List |
The voter list is a printed list of all registered voters,
maintained by the Town Clerk. It includes each voter’s
name, street address, and party affiliation, and indicates whether
he or she voted in the last election. |
Glossary of Town Meeting and Town Finance Terms