4. SR 12-11-1995 - Laserfiche WebLink

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1996 Budget Memo December 7, 1995 ---------------------------------- - - - - -- 46 THE ISSUE Page 2 State law requires a Truth in Taxation public hearing on the city budget and levy, but what people really want to do at this public hearing is to express their concerns over taxes. The preliminary city tax rate in 1996 (based on the current 1996 NTC estimate) is identical to the city tax rate in 1995. This tax rate is 23.958. While the tax rate did not change, additional tax revenues are generated and are available for city programs. This additional tax revenue is generated by a growth in the city's net tax capacity. The net tax capacity for the city increased by 15 percent for taxes payable in 1996. If individual property owners saw an increase in the value of their property, then they also will see an increase in their taxes at the city level regardless of the tax rate remaining unchanged. It should be noted that the city is approximately 22 percent of the total tax rate. Approximately one half of all the taxes a property owner pays go to the school district. The balance goes to the county and to the city HRA and EDA. Overall, I believe that the city provides very good services for the dollars paid by property owners. Some additional information to help everyone understand the status of taxes • in Elk River is offered in the attached League of Minnesota Cities magazine summary and from the 9/15/95 Star Tribune newspaper article on property taxes. The newspaper article shows Elk River with one of the best rankings, regardless if it is considered metro or non - metro, for the taxes a person would pay on a house that sells for $100,000. It should be noted that this house selling for $100,000 may have a different market value in Elk River that it may have in another community. Elk River ranks twenty -fifth best out of twenty -seven non -metro cities and 100 out of 103 metro cities ... The average tax rate information from the League of Minnesota Cities summary shows Elk River with a 1995 tax rate of 104.13. This is lower than the 25 listed metro and non -metro cities that have a population between 10,000 and 20,000. These two attachments help indicate that the taxes paid in Elk River are very reasonable when compared to other communities. THE BUDGET AND TAX LEVY As previously noted, the budget is proposed in the amount of $4,094,750. This is a $362,500 or 9.71 percent increase over the adopted 1995 budget. One organizational change took place in the 1996 budget. This change is the relocation of the use of equipment reserves out of the General Fund budget. This is being done in order to better track the actual expenditures and the funding sources for capital outlay items. Use of the equipment reserves is now separated out of the General Fund and listed in a separate special