By when must the Auditor of Public Accounts change (recertify) the bond and nonbond tax request amounts used to calculate Municipal Equalization Fund state aid?

Plain-English summary

This is an administrative timing ruling aimed at municipalities and the state officials who calculate their aid -- not a taxability question. The Municipal Equalization Fund (MEF) distributes state aid to cities and villages. The Department calculates that aid under Neb. Rev. Stat. § 77-27,139.03 using bond and nonbond property tax request amounts that the Auditor of Public Accounts certifies to the Tax Commissioner.

The problem. In recent years, some municipalities reported wrong numbers to the Auditor, and those errors flowed into the certified amounts used for aid. The ruling sets a procedure and deadlines so municipalities can fix errors while still leaving time to prepare budgets:

1. The Auditor certifies the bond and nonbond tax request amounts to the Tax Commissioner by February 1 (as § 77-27,139.03 requires).
2. The Department posts the state aid amounts and the certified tax request amounts on its website by March 15. A municipality that spots an error must contact the Auditor and may have to file corrected budget documents.
3. If the Auditor accepts the changes, the Auditor recertifies the corrected amounts to the Tax Commissioner -- and any correction must be recertified no later than June 1. Final MEF aid is based on the latest certified amounts as of June 1.
4. The Department makes the final MEF aid figures available by June 15, and payments begin as required by Neb. Rev. Stat. § 77-27,139.04.

Bottom line: the cutoff for changing the certified numbers that drive MEF aid is June 1.

What this means for you

Nebraska municipalities (cities and villages)

If your certified bond or nonbond tax request amounts are wrong, act early. Check the amounts the Department posts by March 15, contact the Auditor of Public Accounts promptly, and be prepared to file corrected budget documents. Any correction has to be recertified by the Auditor no later than June 1, because final aid uses the latest certified figures as of that date. Final aid numbers are posted by June 15.

Municipal finance officers, clerks, and auditors

Build the February 1 certification, March 15 posting, June 1 recertification cutoff, and June 15 final-figure schedule into your budget calendar. After June 1, the certified amounts used for MEF aid are locked in.

Common questions

Q: What is the deadline to correct the certified amounts?
A: June 1. The Auditor must recertify any corrected bond and nonbond tax request amounts no later than June 1, and final MEF aid is based on the latest certified amounts as of that date.

Q: How would a municipality know its numbers are wrong?
A: The Department posts the state aid and certified tax request amounts on its website by March 15. A municipality that finds an error contacts the Auditor and may need to file corrected budget documents.

Q: When are the final aid amounts and payments determined?
A: The Department posts final MEF aid figures by June 15, and payments begin as required by Neb. Rev. Stat. § 77-27,139.04.

Citations and references

• Neb. Rev. Stat. § 77-27,139.03 -- requires the Department to calculate MEF state aid using bond and nonbond tax request amounts certified by the Auditor of Public Accounts (Auditor certifies by February 1).
• Neb. Rev. Stat. § 77-27,139.04 -- governs payment of the MEF state aid.
• Key dates -- Auditor certifies by February 1; Department posts by March 15; recertification cutoff June 1; final figures by June 15.

Source

• Landing page: https://revenue.nebraska.gov/about/legal-information/revenue-rulings-issued-tax-commissioner
• Original PDF: https://revenue.nebraska.gov/sites/revenue.nebraska.gov/files/doc/legal/rulings/rr990903.pdf

Original ruling text

Revenue Ruling 99-09-3
All Nebraska Taxes

June 30, 2009

ADJUSTMENTS TO MUNICIPAL EQUALIZATION FUND
STATE AID CALCULATIONS
Issue:
When can the Auditor of Public Accounts (Auditor) change the certification of bond and nonbond tax
request amounts for inclusion in the calculation of Municipal Equalization Fund (MEF) state aid?
Conclusion:
The Auditor must make any changes in the certification of bond and nonbond tax request amounts for use
in calculating MEF state aid no later than June 1.
Analysis:
The Nebraska Department of Revenue (Department) is required to calculate state aid under Neb. Rev. Stat.
§ 77-27,139.03. The Department is required to use bond and nonbond tax request amounts certified by the
Auditor.
In recent years, there have been several errors in the numbers reported by municipalities to the Auditor
on which the certifications are based. To allow municipalities to correct their errors, and still allow them
sufficient time to prepare their budgets, the following procedure will be used:

1. The Auditor will certify the bond and nonbond tax request amounts to the Tax Commissioner by
   February 1 as required by § 77-27,139.03.
2. The Department will have the amounts of state aid and the tax request amounts from the Auditor’s
   certification posted on its Web site by March 15. If there are any errors in the amounts reported to
   and certified by the Auditor, the municipality will need to contact the Auditor and may be required
   to file corrected budget documents.
3. If the Auditor accepts the changes, the Auditor will recertify the amounts to the Tax Commissioner.
   Any corrected amounts must be recertified by the Auditor to the Tax Commissioner no later than
   June 1. Final MEF state aid amounts will be based upon the latest certified amounts as of June 1.
4. The final numbers of the amount of MEF state aid for each municipality will be made available by
   the Department no later than June 15. Payments based on these final numbers will commence as
   required by Neb. Rev. Stat. § 77-27,139.04.
   APPROVED:

Douglas A. Ewald
Tax Commissioner
June 30, 2009

Nebraska Department of Revenue, P.O. Box 94818, Lincoln, Nebraska 68509-4818
www.revenue.ne.gov