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<br />-5- <br />Tax capacity is considered the actual base available for taxation. It is calculated by applying the state’s <br />property classification system to each property’s market value. Each property classification, such as <br />commercial or residential, has a different calculation and uses different rates. Consequently, a city’s total <br />tax capacity will change at a different rate than its total market value, as tax capacity is affected by the <br />proportion of its tax base that is in each property classification from year -to-year, as well as legislative <br />changes to tax rates. The City’s tax capacity increased 10.6 percent and 4.8 percent for taxes payable in <br />2023 and 2024, respectively. <br /> <br />The following graph shows the City’s change in tax capacities over the past 10 years: <br />$– <br /> $5,000,000 <br /> $10,000,000 <br /> $15,000,000 <br /> $20,000,000 <br /> $25,000,000 <br />2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 <br />Total Taxable Tax Capacity <br /> <br />The following table presents the average tax rates applied to city residents for each of the last three levy <br />years: <br /> <br />Rates expressed as a percentage of net tax capacity <br />2022 2023 2024 <br />Average tax rate <br />City 35.2 33.9 34.9 <br />County 48.1 44.9 45.4 <br />School 23.4 18.4 16.5 <br />Special taxing 9.9 8.7 9.0 <br />Total 116.6 105.9 105.8 <br />City of <br />Mounds View <br /> <br />The average tax rate remained similar to the prior year. Increases in property valuations impacted the <br />change in the average tax rate.