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<br /> ARDEN HILLS TRUTH-IN-TAXATION - DECEMBER 7,1998 2
<br /> . Mr. Post stated the presentation for the Truth-In-Taxation public hearing reviews the 1999
<br /> proposed budget in three general categories.
<br /> Category A, Making Sense of Property Taxes, provides an understanding of how the City's
<br /> market valuation, tax capacity and median values, specific to Arden Hills, impacts the property
<br /> taxes,
<br /> Category B, Cost of City Services in Perspective, provides a hypothetical monthly service bill
<br /> which breaks down the cost of the services received by the citizens of Arden Hills,
<br /> Category C, Discussion of Proposed City Budget, explains the specifics of the proposed budget
<br /> in a more detailed fashion.
<br /> Mr. Post proceeded with the slide presentation, He explained Slide #1, Who Determines Your
<br /> Property Tax, was a three-legged process in terms of the components of the property taxes, State
<br /> Legislature establishes property class rates, determines formulas for State Aid and determines
<br /> mandates which may impact local governments. The County Assessor determines market values
<br /> and assigns property classes. Mr. Post stated the public hearing will not address the State or
<br /> County components of the property taxes, What will be discussed was the City taxing
<br /> jurisdiction, Other jurisdictions including the School District, the County and miscellaneous
<br /> jurisdictions will not be addressed,
<br /> . Slide #2, Tax Computation Example, provides an example of how property taxes are calculated,
<br /> The first step was determining the property's tax capacity, This was determined by the class rate
<br /> and the market value determined by the County Assessor. The tirst $75,000 of the estimated
<br /> market value has a 1% tax capacity, The estimated market value in excess of $75,000 has a tax
<br /> capacity of 1,7%, For a home in Arden Hills, with an estimated median market value of
<br /> $146,850, there would be a net tax capacity of$1,971.45, To determine the total property taxes,
<br /> each of the jurisdictions have created a budget which was translated to a levy for the needs of the
<br /> budget which are supported by property taxes, This levy amount was compared against the total
<br /> tax capacity for the jurisdiction and a percentage yielded, In the case of Arden Hills, the local
<br /> City levy proposed for 1999 would be 19,054%, This percentage, multiplied by the tax capacity
<br /> of$1971.45, would result in a local city tax of$375.64, When this was added to the other
<br /> jurisdiction's levy rates, the total proposed 1999 property tax payable would be $2,413.17.
<br /> Slide #2A lists a number of changes in class rates which have occurred over the last three years,
<br /> The primary changes have involved the Commercial/Industrial class rate. With a market value
<br /> over $150,000, the marginal class rate for CommerciallIndustrial was 4.6% in 1997. This has
<br /> been lowered in two significant increments, In 1998 the class rate was lowered to 4,0% and was
<br /> further lowered to 3.5% for 1999. This equates to a 24% drop in Commercial/Industrial property
<br /> class rates over the last three years, The impact of this drop in class rate will be that, over time,
<br /> the residential properties will pick up a greater portion of the tax capacity than
<br /> CommerciallIndustrial compared to the 1997 rates assuming the mix of valuations remains
<br /> . relatively constant
<br /> Slide #3, Legislative Changes/Class Rates and Thresholds, was a historical look at the City's
<br /> valuation, tax capacity and tax levies since payable year 1992. A highlight was that, for payable
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