Hansen memo to Thomas Budget Issues

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• • Minn.Stat.§ Under the 2001 law change,the advertisement published by cities of at least 2,500 5a. population subd. population must now show three tax rates: 1)the current local tax rate,2)the proposed rate if no levy increase is adopted and 3)the tax rate under the proposed budget. D. Public hearing and publication exemption Minn.Stat.§ Beginning this fall, a county, a city over 500 population, a school district,or a s,subd.6 (b). metropolitan s ecial taxing district is exempt from the TNT public hearing requirement if its total proposed property tax levy does not exceed its previous year final property tax levy by more than the percentage increase in the implicit price deflator(IPD).A taxing authority exempt from the TNT public hearing requirement is also exempt from the requirement to publish(or post) a notice of TNT public hearing. The levy amounts compared to determine this exemption must be the taxing authority's total levy,both net tax capacity and market value based, as well as debt and non-debt. The IPD is the one for government consumption expenditures and gross investment for state and local governments prepared by the Bureau of Economic Analysis of the U.S. Dept. of Commerce for the 12-month period ending March 31 of the levy year. For levy year 2002,taxes payable 2003,this percentage increase in the IPD is 0.7618 percent. A taxing authority's exempt status under this provision is to be • determined annually. For the purpose of the TNT parcel specific notices,the county auditor will need to verify the exempt status of the county, each school district within the county, each city over 500 population within the county,and the metropolitan special taxing districts (if applicable). The Dept. of Revenue will provide the county auditors, school districts, cities over 500 population, and the metropolitan special taxing districts with the information needed to make this determination in early June of this year. It will include the payable 2002 final total property tax levy of these taxing authorities,as well as the maximum proposed property tax levy they may have for payable 2003 and still qualify for the exemption. See the Dept.of If a taxing authority's actual proposed property tax levy for payable 2003 is less than Revenue web site: or equal to the maximum allowable for exemption,the taxing authority is exempt from (www.taxes.state the public hearing requirement. If a taxing authority's actual proposed property tax .mn.us/proptax/p levy for payable 2003 is greater than the maximum allowable for exemption,the ropinfo/tnt/tnt m ain.html) taxing authority is not exempt from the public hearing requirement. Note:A taxing authority that is exempt from the TNT public hearing requirement for a year may still choose to hold this hearing. • Guidelines for Preparing City Budgets 2003 21