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57 <br /> 85 E. SEVENTH PLACE.SUITE 100 <br /> SAINT PAUL,NIN 55101-2887 <br /> 651-223-3000 FAX:651-223-3002 SPRINGSTE <br /> • Advisors to the Public Sector <br /> MEMORANDUM <br /> TO: City of St. Anthony <br /> FROM: Bob Thistle, Jerry Shannon <br /> DATE: January 12, 2001 <br /> SUBJECT: Tax Abatement Process <br /> When an abatement district is formed, it is intended that the revenues from those parcels in the <br /> district will pay the costs of eligible improvements. The amount of the abatement is wholly <br /> dependent on the value of the parcels and the tax capacity rate of the municipality. <br /> • Unlike tax increment districts, the value of parcels in an abatement district is included in the <br /> value against which the tax rate is determined. Thus, it will be necessary to adjust any levy <br /> request to include the expected abatement. If such an adjustment is not made, the total <br /> revenues available to the City will be reduced by the amount of the required abatement and <br /> therefore, the entire community will end up paying for the cost of the abatement. <br /> It is critical to understand that the tax abatement process would assume no increase in the tax <br /> rate (all other things being equal). Therefore, an adjustment in the tax levy would be necessary <br /> to eliminate the payment of the abatement by the entire municipality. <br /> The following exemplifies this process assuming an abatement district with a tax capacity of <br /> $89,000 and required abatement of $27,240. We have assumed that the TIF Districts have <br /> been decertified and that value would now be the Abatement District value and thus available <br /> for general taxation. <br /> • <br /> CORPORATE OFF/CE: SAINT PAUL,MN • Visit our website at www.springsted.com <br /> DES MOINES,IA • MILWAUKEE,WI • MINNEAPOLIS,MN • OVERLAND PARK,KS • VIRGINIA BEACH,VA • WASHINGTON,DC <br />