2001-11-28 CC - Laserfiche WebLink

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Q: Won't the city property tax increases to replace lost state aids draw intense criticism from our taxpayers? A: This could happen, particularly if city officials are not prepared to explain the legislative changes enacted this year. However, due to the magnitude of the changes to the tax system, the parcel-specific notices sent to taxpayers this fall will not itemize the 200 i city taxes and the 2002 proposed city taxes. The only direct comparison on the form will be the total 2001 taxes to the proposed 2002 total taxes. This structure will hopefully avoid any wmecessary taxpayer concerns about increases in city levies due to lost state aids. Despite this one-year change in the parcel-specific notice, you will still want to be prepared to explain these changes to taxpayers. For example, rather than focusing solely on the change in the property tax levy, a more complete statistic might be the change in total budgeted expenditures, which would factor out significant changes in state aids. Q: Levy limits will be in place for two years. Should we levy "to the limit" so that the city preserves its levy authority jQr future years? A: Each city council will have to make a decision on local needs and the level of property taxes needed. Fortunately, levy limits are structured so that unused levy authority in any year is carried fonvard for future years. This structure was established so that cities and counties would not be encouraged to simply levy to the limit. Of course, the legislature could always change this provision but the "if you don't use it you won't lose it" structure of levy limits seems to have broad 1egi~lative support. Q: Why was HAeA eliminated? A: The answer is not simple but the overall cost of the tax bill, including the state takeover of the total general education costs for schools, required the state to reprioritize its appropriations. Many legislators viewed HACA as an undefined state aid that had little purpose largely due to the fact that there is no active fOffi1Ula to determine HACA distributions. The $200 million in HACA that had been distributed to cities was used to pay for the costs associated with the overall tax reform package. Q: Will the Fiscal Dispa7'ities p7'Ogram be affected by the significant class rate reductions contained in the tax bill? A: For 2002, the interaction of the tax reforms and fiscal disparities program will have no net impact on city finances. The fiscal disparities program is computed based upon property tax values from the previous year. Therefore, the amount of property taxes ultimately distributed to each city under the fiscal disparities program will not be affected. Q: In the future, will school districts levy any property toxes? A: 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 impose 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, there are preliminary indications that many school districts may seek new or expanded voter approval for operating levies. .