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Tax capacity is considered the actual base available for taxation. It is calculated by applying the state's <br />property classification system to each property's market value. Each property classification, such as <br />commercial or residential, has a different calculation and uses different rates. Consequently, a city's total <br />tax capacity will change at a different rate than its total market value, as tax capacity is affected by the <br />proportion of its tax base that is in each property classification from year-to-year, as well as legislative <br />changes to tax rates. The City's tax capacity increased 0.1 percent for 2022 and increased 12.9 percent <br />for 2023. <br />The following graph shows the City's change in tax capacities over the past 10 years: <br />Total Tax Capacity <br />$25,000,000 <br />$20,000,000 <br />$15, 000,000 <br />$10,000,000 <br />$5,000,000 <br />2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 <br />The following table presents the average tax rates applied to city residents for each of the last three levy <br />years: <br />Rates Expressed as a Percentage of Net Tax Capacity <br />City of Arden Hills <br />2021 2022 <br />2023 <br />Average tax rate <br />City <br />25.1 26.5 <br />23.6 <br />County <br />47.7 48.1 <br />44.9 <br />School <br />23.9 23.4 <br />25.5 <br />Special taxing <br />7.8 10.0 <br />8.8 <br />Total <br />104.5 108.0 <br />102.8 <br />The overall decrease in the average tax rate was spread across most of the taxing authorities as presented <br />in the table above, with a slight increase in the school portion. Increases in property valuations <br />contributed to the change in the average tax rate. <br />-5- <br />