2022 Management Letter - Laserfiche WebLink

Home

-6- Tax capacity is considered the actual base available for taxation. It is calculated by applying the state’s property classification system to each property’s market value. Each property classification, such as commercial or residential, has a different calculation and uses different rates. Consequently, a city’s total tax capacity will change at a different rate than its total market value, as tax capacity is affected by the proportion of its tax base that is in each property classification from year -to-year, as well as legislative changes to tax rates. The City’s tax capacity increased 14.3 percent in 2021 and decreased 0.4 percent in 2022. The following graph shows the City’s change in tax capacities over the past seven years: $– $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 2016 2017 2018 2019 2020 2021 2022 Local Tax Capacity The following table presents the average tax rates applied to city residents for each of the last three levy years: 2020 2021 2022 Average tax rate City 41.3 36.3 38.1 County 52.3 47.7 48.1 School 36.8 37.1 34.8 Special taxing entities 6.6 6.0 8.1 Total 137.0 127.1 129.1 Rates Expressed as a Percentage of Net Tax Capacity City of Gem Lake The improvement in tax capacity values, as previously discussed, contributed to the decrease in the City’s average tax rate presented in the table above.