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  <br />  <br />  <br />MEMORANDUM <br /> <br />TO: Chris Heineman, Little Canada City Administrator <br />FROM: Jeanne Vogt, Sr. Fiscal Consultant <br />DATE: April 21, 2022 <br />SUBJECT: Little Canada Fiscal Disparities Program <br /> <br /> <br />The City of Little Canada has requested Ehlers to provide a brief summary of the metro area Fiscal <br />Disparities program and how potential future development could impact the City’s distribution <br />from the Fiscal Disparities Pool (“the Pool”). <br /> <br />BACKGROUND <br />Fiscal disparities is a tax base sharing program of the property tax system that was created in 1971 <br />for the seven metropolitan counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and <br />Washington. There is another fiscal disparities pool located in northern Minnesota that will not be <br />discussed here. <br /> <br />HOW IT WORKS <br />Under this program, each taxing authority contributes 40% of the prior year’s adjusted <br />commercial / industrial tax base growth since 1971 into the Pool. For Pay 2022, Little Canada <br />contributed $2,321,601 of it’s tax base to the Pool. This contribution to the Pool is subtracted from <br />the ad valorem tax base of each taxing authority when calculating tax rates. This net amount is the <br />denominator for calculating tax rates. <br /> <br />Distribution from the pool is based on a combination of population and fiscal capacity. Fiscal <br />capacity is defined as the indicated market value divided by population. This information is <br />provided the Minnesota Department of Revenue and the Metropolitan Council each year. The <br />fiscal capacity of each municipality is compared to the total pool to determine how much each <br />receives from the Pool. For Pay 2022, Little Canada received $2,025,834 in tax base from the Pool. <br />Below shows a 5-year historical comparison of Little Canada’s contribution to the Pool to <br />distribution. <br /> <br />