2023 Management Letter - Laserfiche WebLink

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-5- 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 11.8 percent and decreased 0.4 percent for taxes payable in 2023 and 2022, respectively. The following graph shows the City’s change in tax capacities over the past eight years: $– $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 2016 2017 2018 2019 2020 2021 2022 2023 Local Tax Capacity The following table presents the average tax rates applied to city residents for each of the last three levy years: 2021 2022 2023 Average tax rate City 36.3 38.1 40.8 County 47.7 48.1 44.9 School 37.1 34.8 32.4 Special taxing entities 6.0 8.1 7.1 Total 127.1 129.1 125.1 Rates Expressed as a Percentage of Net Tax Capacity City of Gem Lake The increase in the tax levy of the City was the primary cause for the increase in the average tax rates of the City in fiscal 2023. The total average tax rates declined; the result of improved tax capacities as noted earlier on this page.