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LEAGUE OF MINNESOTA CITIES CONNECTING & INNOVATING SINCE 1913 How to estimate your 2011 levy limit Updated 7/27/2010 • Again for 2011 levy limits will only be in effect for cities over 2,500 population. Under current law, levy limits expire after 2011. • The language on levy limits is contained in Chapter 275 of Minnesota statutes. • Slight changes to the levy limit law were made during the 2010 session: HF3729 and Chapter 215. • The final inflationary increase percentage for 2011 levy limits is 1.6784%. • The Dept. of Revenue will be certifying levy limits by Sept. 1, 2010. Cities must indicate to the Dept. using the PT280 form which special levies they are intending to use by Sept. 30, 2010. Step 1: Start with your city's adiusted levy limit base for pav 2010 (note that starting with the adjusted levy limit from last year means that any unused levy authority is retained going forward for your city). You can arrive at this figure by adding your maximum allowable levy (the limited piece) for payable 2010 to your certified 2010 LGA, 2010 taconite aid (if applicable), 2010 wind energy production tax (if applicable) and your 2010 utility valuation transition aid (if applicable). This is your city's levy limit base. Step 2: Multiply your levy limit base by 1.6784% (the levy limit law says the inflationary increase is the lesser of 3.9% OR the change in the implicit price deflator (IPD) for local governments). The 2010 legislature clarified that the change cannot be less than zero percent. Step 3: Multiply the result of Step 2 by 1 plus one-half of the percentage increase, if any, in the number of households in your city over the last year. Step 4: Multiply the result of Step 3 by 1 plus one-half of the percentage increase in the total taxable market value for all kinds of property as a result of new construction of just commercial and industrial (CI) property. (This adjustment only applies, in other words, if your total taxable market value increased AND you had new CI construction). The result is your adjusted levy limit base for pav 2011. Step 5: From your adiusted levy limit base for 2011, subtract your 2011 certified LGA (if applicable), your 2011 taconite aid (if applicable), your 2011 wind energy production tax (if applicable), and your 2011 utility valuation transition aid (if applicable). The 2010 Legislature confirmed and clarified that certified aid amounts are to be used in the calculation. At this point, 2011 LGA amounts are estimates only (see spreadsheet on LMC website). Certified aid amounts for 2011 will be announced by DOR by the end of July 2010. The result is your 2011 levy limit. See the following pages for detailed information on special levies for pay 2011. 145 UNIVERSITY AVE. WEST PHONE: (651) 281-1200 FAH: (651) 281-1299 ST. PAUL, MN 55103-2044 TOLL FREE: (800) 925-1122 WEB: WWW.LMC.ORG