Agenda Packets - 1992/09/08 - Laserfiche WebLink

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SEPTEMBER 2, 1992 PAGE TWO OF THREE If the Fund Balance and/or the franchise fees are not used to balance the 1993 Budget the following actions would have to be taken to achieve a balanced Budget: 1) Reduce expenditures. 2) Increase property taxes. 3) A combination of 1 and 2. Recently information about 1993 fiscal disparities was received from the County. The City will receive $436,793 in fiscal disparities payments in 1993. That is an increase of $120,649 over 1992 fiscal disparities payments of $316,144. This increase in fiscal disparities payments has the effect of lowering tax rates because it reduces the amount of property taxes that must be collected from local taxpayers. I have recalculated the impact of the City's portion of property taxes on the taxpayer taking into account the updated information received from Ramsey County on fiscal disparities. If the City levies the same dollar amount of property taxes in 1993 as it did in 1992 the City's portion of the property tax bill would be 8.71% less. The 1993 tax capacity rate would be 19.304% compared to the 1992 rate of 21.147%. Please see the attachment entitled "1993 Property Tax Levy Alternatives". That attachment lists several 1993 property tax levy alternatives which have been discussed at previous budget work sessions. One alternative has been to have a property tax levy which does not increase property tax bills. That could be accomplished by having the same tax capacity rate in 1993 that the City had in 1992. The 1992 tax capacity rate was 21.147%. Using the 1992 tax capacity rate in 1993 would result in no property tax increase to the taxpayer. It would, however, generate an additional $79,225 of property tax revenues. See B of 1993 Property Tax Levy Alternatives. The 1992 rate of inflation has been projected to be 3% - 4%. Alternatives C and D show the effect of a 3% and 4% increase in property tax bills. A 3% increase in property tax bills would raise $106,475 more taxes than were levied in 1992. A 4% increase in property tax bills would raise $115,475 more taxes than were levied in 1992. As was mentioned above the City's proposed General Fund Budget was balanced in part by the assumption that $154,561 of franchise fees would be allocated to the General Fund. Alternative E shows the effect upon property tax bills if property taxes were used instead of the franchise fees to balance the Budget. If property taxes were used to balance the Budget instead of franchise fees property tax bills would increase 8.29%.