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0.015444 Anoka County City of Lino Lakes One last important point to make note of is that the assessment is complete before the budgeting process begins. Assessors do not adjust values in order to increase revenue. There is little correlation between changes in assessments due to market changes and how the resulting real estate tax changes. When we adjust assessments due to the market going up or down, all properties are adjusted. The only time that an adjustment in an assessor's estimated market value will have an impact on the increase or decrease in tax is if the change in value is due to value added for new construction or value removed due to demolition /destruction of an improvement. How your tax amount changes from year to year is influenced more by statutory changes to the tax structure and revenues needed by your local taxing authorities (including school districts). If we were to reduce all values by 50 %, the resulting tax would not go down by 50 %, the tax rates would be increased to generate the same tax revenue. The following example illustrates that basic concept. The values are reduced which decreases the overall tax base. PROPERTIES Estimated Market Individual Real Estate Value Tax Amount Property 1 $375,000 $2,896 Property 2 $120,000 $927 Property 3 $150,000 $1,158 Property 4 $400,000 $3,089 Property 5 $250,000 $1,931 Total Tax Base $1,295,000 (sum of all property values) Amount of Revenue Tax Rate (Revenue Needed /Tax �ase1 1 Needed $10,000 0.007712 Generated $10,000 The Tax Amounts Remain the Same Estimated Market Individual Real Estate PROPERTIES Value Reduced by 50% Tax AmotMt Property 1 $187,500 Property 2 $60,000 Property 3 $75,000 Property 4 $200,000 Property 5 $125,000 $2,896 $927 $1,158 $3,089 $1,931 Total Tax Base $647,500 (sum of all property values) Amount of Revenue Tax Rate (Revenue Needed /Tax Needed $10,000 Generated $10,000 When the Tax Base decreases, the Tax Rate is adjusted upward to produce the same amount of revenue. Adhering to the same timeframes and working within the parameters of the law will ensure that everyone is being treated fairly. If assessors were to choose to work outside of those timeframes the end result would be inequity between taxing jurisdictions. For an Anoka County example, if the assessor were to decide that the sales period for Blaine was going to be January 1, 2008 to December 31, 2008 instead of October 1, 2007 to September 30, 2008 like the rest of the county, and given the volatility in today's market, the Blaine assessments would be measurably lower than the rest of the county for the 2009 assessment. That in turn would not reduce the amount of county revenue generated by real estate tax, it would result in a shift in that tax burden from Blaine properties to all of the properties in the county. While Blaine property owners would enjoy a lower tax amount, the rest of the county property owners would unfairly be paying a disproportionately higher tax amount. So, while it may seem arbitrary to have a set period to measure an assessment, it does create an environment whereby the assessments are uniform and fair. 6