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Breaking down just the increase in the total levy, it can be summarized as follows; <br />The General Fund Levy accounts for about $1.1 million, or 52.4%, <br />of the increase. <br />Debt Service Levies account for $203K, or 9.6%, of the increase. <br />Capital Levies account for $807K, or 38%, of the increase. <br />In order to distribute the levy across the city, the County utilizes calculations of market value, homestead <br />exclusions, and class rates to calculate the tax capacity of each property. The sum of all tax capacity is <br />compared to the levy requested (less fiscal disparities) to determine the local tax rate. The Levy History <br />charts in the Appendices provide more insight on trends in this area. <br />Note: when we discuss or illustrate values and capacity below, it is shown in the “Tax Year”, as opposed <br />to the “Assessment Year”, which is the year prior. Those assessments are based on property and sales <br />evaluations from the year prior to the assessment year, so values and capacity for the tax year lag roughly <br />1.5 - 2 years behind the actual market or construction activity. <br />The total tax capacity for tax year 2026 for Lake Elmo increased by $1.4 million, or 3.73%, to $ 39,039,717, <br />a similar increase to the prior year. In comparison, the 3 years prior (2022-2024) averaged over 18% <br />increases, and the 10-year average is 11.5%. <br />The slowed increase is due largely to the slowdown of housing prices & development, and a shift in <br />development from single-family to multifamily. The increase to existing market value (market value less <br />new improvements) is now under $26 million, whereas the 10-year average is closer to $120 million. In <br />addition, new improvements have slowed to a rate closer to the average of 2019 – 2022, at just over $84 <br />million.