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12-11-23-R
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12-11-23-R
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<br /> <br />Property Tax <br /> <br />The City of Arden Hills levies property taxes for its General Fund Operations. The levies are <br />allowed by State Law, and are collected from property owners by Ramsey County and <br />distributed to the City in July, December, and January. <br /> <br />Property Tax Reform <br />During 2001, the State Legislature passed a major Property Tax Reform Bill that dramatically <br />impacted State funding to local governments. Levy limits returned, and a major shift in the <br />State Funding of school districts resulted in the elimination of some aids for cities. The <br />intention of the State Legislature was to have cities make up for this lost aid through the <br />property tax levy. This reduced the reliance of cities on State Aid, and allows the property tax <br />levy to make up a larger share of the General Fund Revenues. Arden Hills did not receive a <br />significant portion of Local Government Aid, thus was not impacted. <br /> <br />As the Legislature entered the 2003 session, the situation with the economy was creating a <br />State Deficit of over $4 billion. The State enacted many reductions in order to balance the <br />budget. As part of those reductions, cities had their property tax aid decreased for 2003 and <br />2004. The Market Value Homestead Credit (MVHC) reduction amount for 2003 was $100,979 <br />or 100% of the aid amount the city was initially certified to receive. The cities were then only <br />allowed to levy back for 60% of the permanent LGA losses from 2003 and 2004. In 2005, the <br />Legislature readjusted the formula for State Aid and increased the overall State Aid to cities by <br />$48 million. The formula change was detrimental to most inner ring suburbs and most cities in <br />turn saw a total elimination of its LGA. <br /> <br />In 2008, the State again was facing a deficit and the Government chose to unallot the second <br />half payments of LGA and MVHC which were to be distributed in December 2008. This was a <br />loss of $26,272 to the City. As the State economic forecast did not improve in 2009 or 2010, all <br />LGA and MVHC aid was unallotted, this was a loss of $55,923 and $61,774 for the City. In mid‐ <br />2010, the Governor unallotted the 2011 MVHC aid which was estimated at $61,774 for Arden <br />Hills. <br /> <br />The 2011 legislature eliminated the MVHC program for 2012, thus taking local governments out <br />of the equation. A new program gives homesteaded property owners a Market Value Exclusion <br />(MVE) on the value of their property and gives these property owners basically the same effect. <br />However, this shifts taxes to non‐homesteaded property as each local jurisdiction is now <br />receiving its full levy, including the City. This results in shifting a significant portion of the City’s <br />levy (and other local jurisdiction’s levy) to Commercial/Industrial property and those <br />homesteads whose value is over $413,800 where the exclusion is eliminated. <br /> <br /> <br /> <br /> <br />12
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