6. SR 12-05-1994 - Laserfiche WebLink

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1995 Budget Memo December 1, 1994 Page 2 e THE ISSUE While the State law requires a Truth in Taxation public hearing on the City budget and levy, what people really want to do is come to this meeting and express their concerns over taxes. People may not necessarily want to discuss various components and sections of the City budget at this 12/5 public hearing. There is no doubt that the increases in City expenditures in 1995 are causing the taxes to go up. Unlike the last few years, in 1995 the City is one of the reasons why the taxes are increasing. e The other factor for why taxes will be increasing in 1995 is because of changes in the property valuation. The valuations are determined for the City by the County Assessor. If your property valuation did not change in 1995, and you lived in the urban service district, your City taxes would have gone up less than 10 %, and you would have had no increase in your overall taxes. However, if your property value increased, you will see an increase in your total tax bill. The impact on your tax bill due to an increase in your taxable market value has been discussed many times over the past few years by the City Council, and everyone should be aware of this significant impact. The attached 11/30/94 Elk River Star News article further explains these taxes and valuation issues. Regardless of the increase in a property's taxable market value, the City is increasing revenues and this is causing the taxes to go up. The City can raise about $250,000 in tax revenue without any tax rate change based on the growth in our net tax capacity. The City is increasing its taxes more than this amount in 1995 for the General Fund, debt services and surface water management program. The City needs additional revenues in 1995 for ongoing and special programs in order to keep pace with inflationary factors and growth and development issues. e While the City cannot dispute the fact that its proposed tax levy is going to go up faster than the growth in its net tax capacity, it is appropriate to offer some past history of the City's urban tax rate and the City's share the total tax rate. It should be noted that the 1994 City tax rate of 21.9 was less that the City tax rate of 22.62 in 1990. During this same time that the City tax rate decreased, the total tax rate in the community increased from 97 to 108. Even after the proposed City increases in 1995, the City share of the total tax bill is less in 1995 than it was in 1990. The attachment on the City tax rate information offers this data for your review. This information clearly shows that the City has made a strong effort in the past few years to keep its tax rate stable.