CC WORKSESSION 10071997 - Laserfiche WebLink

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MEMORANDUM DATE: September 24, 1997 TO: Mike Morrison, City Manager FROM: Roger Larson, Finance Director ITEM: TAX RATE INCREASE /DECREASE IN TAX CAPACITY The County has provided the City with the necessary information to calculate St. Anthony's proposed tax rate for 1998. Based on the current levy and changes the State Legislature made to the class rates, St. Anthony's tax rate will increase 2.826 %. The reconstruction of the class rates dropped the City's Total Local Tax Capacity by $271,108. The major change in the class rates was a reduction in the percentages for commercial and apartment properties. This created a significant lowering of their tax capacities. Overall in Hennepin County, commercial tax capacity dropped 16 % and apartment tax capacity dropped 16 %. Residential did drop slightly, but not enough to offset the notable change to commercial and apartments. As a result, the tax burden is shifting away from commercial and apartment properties to residential homeowners. Without the drop in St. Anthony's Total Local Tax Capacity, residential taxes would have remained approximately the same as last year or increased slightly because of a property value increase. Because of the Class Rate changes dropped the City's total valuation, the average home valued at $110,000 with no valuation change, will pay an additional $18.00. Those properties with increased valuation (approximately a 3.6% increase Citywide) will see their City taxes rise $40.00. Meanwhile, a commercial property valued at $200,000 will decrease by $238.00 and an apartment building valued at $200,000 will decrease $101.00. Looking at the overall picture there is good news. Taxpayers tend to look at the bottom line of their tax statements. The State Legislature increased state aid to the school district's, which shifts school funding away from local taxpayers. Because of the additional state aid revenue, I.D.S. #282 (which makes up 50% of the total taxes on the statement) estimates their levy will decrease about 6 %.