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(Draft January 2002) Key Financial Strategies <br /> For Elk River <br /> <br />Legislative policies account for the difference in growth rates between Estimated <br />Market Value and Tax Capacity. The county assessor sets the EMV for every <br />parcd of property in the City. The State Legislature sets the percentage factors <br />(class rates) that convert EMV to Tax Capacity. <br /> <br />The chart bellows shows adjusted net tax capacity (after deducting values in tax <br />increment financing districts) as a percent of total estimated market value. This <br />ratio provides a measure of how growth converts to tax base. <br /> <br />· The tax base created by new development eroded steadily over time. <br /> <br />· This trend is the result of legislative changes t© reduce class rates. <br /> <br />· Significant changes to class rates in 2001 continued this trend. <br /> <br />This trend is a key financial strategy for the City. The ability to capture <br />tax base and new revenues from growth is controlled by the Legislature. <br />Future legislative actions cannot be predicted. <br /> <br />2.50% <br /> <br />2,25% <br /> <br />2.00% <br /> <br />1,75% <br /> <br />1.50% <br /> <br />1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 <br /> <br />Figure 6- Market Value to Tax £apadty Ratio <br /> <br />Page <br /> 26 <br /> <br /> <br />