2001-11-28 CC - Laserfiche WebLink

Home Browse Search

How are cities affected by new levy limits? Levy limits will be in place for 2002 and 2003 for all cities with populations more than 2,500. The state will calculate an allowable growth of a city's levy based on inflation, that city's household growth and its growth in commercial/industrial property. Levy limits also allow cities to "levy back" lost state aids. Local gQvernmentscan exceed theirlevylimitsto cover debt service, disaster costs, matching fund requirements, tax abaternenrrevies,-an(rtlle~P'l1mrcbmployees Retirement Account contribution increase mandated by the state. And with voter approval, counties and affected cities can exceed their levy limits for any reason. But the Legislature and governor have said most taxpayers will see property tax reductions. What do their estimates take into account? All of the analyses prepared by the House Research Department assumed that cities would replace 100 percent of lost state aid with property taxes. In other words, even with these increases in the city share of the property tax bill, taxpayers are expected to see property tax reductions in 2001. What about class rate reductions and how are city budgets affected? During the 2001 session, the Legislature approved class rate reductions for virtually every category of property. This will reduce the tax base of each jurisdiction, forcing the tax rate to increase in order to raise the same amount of money as they did last year. In the future, will schools levy any property taxes? Yes, school districts will still levy some property taxes including levies for community service, health and safety, integration and building leases. Many school districts also have additional voter approved levies for operation and debt service for capital projects. In fact, due to school district concerns about the level of available school revenue under the 2001 omnibus education funding bill, many school districts sought new or expanded voter approval for operating levies on Nov. 6. What about this new state property tax? The state will levy a new property tax that will be applied only to commercial, industrial and seasonal recreational (cabin) properties. The state tax will be administered just like any other local government's property tax levy and will be included as a line item on the property tax statement. The state property taxes will be deposited in the state's general fund and will therefore be available for general state spending. [November 2001)