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PROPERTY TAXES <br /> Minnesota cities rely heavily on local property taxes to support governmental fund activities. In the 2025 <br /> fiscal year, ad valorem property taxes provided 47.9 percent while tax increment provided 13.0 percent of <br /> the City's total governmental funds revenue. <br /> The City's taxable market value increased by 4.1 percent for taxes payable in 2024 and 2.1 percent for taxes <br /> payable in 2025. The following graph shows the City's changes in taxable market value over the past <br /> 10 years: <br /> Taxable Market Value <br /> $1,800,000,000 <br /> $1,600,000,000 <br /> $1,400,000,000 <br /> $1,200,000,000 <br /> $1,000,000,000 <br /> $800,000,000 <br /> $600,000,000 <br /> $400,000,000 <br /> $200,000,000 <br /> $- <br /> 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 <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 4.8 percent and decreased 0.9 percent for taxes <br /> payable in 2024 and 2025,respectively. <br /> The following graph shows the City's change in tax capacities over the past 10 years: <br /> Local Net Tax Capacity <br /> $25,000,000 <br /> $20,000,000 <br /> $15,000,000 <br /> $10,000,000 <br /> $5,000,000 <br /> 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 <br /> -7- <br />