The Tax Collector's Bond is based on a percentage of which of the following?

• A. Prior Year Tax Levy
• B. Current Year Tax Levy
• C. Total Tax Levy
• D. Taxable Property Value

Answer: (A)

The amount of a Tax Collector's Bond is tied to the amount the collector is expected to handle, which is reflected by the prior year's tax levy. Using the prior year provides a stable, known base for calculating the bond, ensuring it's enough to cover the duties and potential liabilities tied to the taxes that will be collected in the upcoming year. It avoids guessing on what the current year's levy will be, which can change due to assessments, appeals, or rate adjustments.

For example, if the prior year levy was $2,000,000 and the bond rate is 1%, the bond would be $20,000, protecting against mismanagement or loss in the year the taxes are collected.

Using the current year levy would be unreliable because that amount isn’t finalized yet. The total tax levy could be misleading or broader than what the bond needs to cover, and taxable property value isn’t used to determine the bond in most standard practices.