Laserfiche WebLink
City of Mounds View Staff Report <br /> June 14, 2000 <br /> Page 3 <br /> • jurisdiction has the option of specifying the percentage of taxes that could be pledged for a particular <br /> project. The political subdivision also has discretion in the number of years that a project could be <br /> funded (Bubul et al 11). <br /> Pay-as-you-go financing is the preferred method of finance due to the limited liability incurred by the <br /> grantor. However, there are some projects that will not be viable without an up front injection of equity. <br /> In this instance, it may be necessary to issue bonds on behalf of the project. (Bubul et al 11) <br /> Economic development is a function that is commonly associated with local government. However, <br /> the property taxes collected at the municipal level are typically the smallest of the three primary taxing <br /> jurisdictions. Thus, the ability to generate revenue based simply on a municipal abatement is rather <br /> limited. For example, the overall tax rate for property located in the City of Mounds View is 124.556 <br /> percent. Of that 124.556%, 25.551% can be attributed to the city, or approximately 20.5% of the total <br /> property tax liability for a Mounds View taxpayer. Comparatively speaking, Ramsey County and the <br /> Mounds View Public School District account for approximately 79.5% of the total. Needless to say, <br /> this places a significant constraint on a city's ability to generate abatement revenue individually. The <br /> following calculations are illustrative: <br /> 2000 Abatement Calculation: <br /> City of Mounds View Only <br /> Total Tax Capacity ($1,000,000 Commercial Project): $40,481 <br /> City Tax Rate: 25.551% <br /> Percent Abated: 95% <br /> 2000 Abatement Payment: $9,826.14 <br /> 5 Year Revenue Projection: $49,130.70 <br /> 2000 Abatement Calculation: <br /> City of Mounds View & Ramsey County <br /> Total Tax Capacity ($1,000,000 Commercial Project): $40,481 <br /> City Tax Rate: 25.551% <br /> County Tax Rate 44.839% <br /> Percent Abated: 95% <br /> 2000 Abatement Payment: $27,069.85 <br /> 5 Year Revenue Projection: $135,349.25 <br /> • <br /> N:\DATA\GROUPS\ECONDEV\EDC\Staff Reports\StaffOO\06-6A.doc <br />