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City Manager's 2006 Budget Recommendations Thursday, October 20, 2005 Let me give a simple example. In percentage terms, if you increase one dollar by one dollar, you have a 100% increase; two dollars is 100% more than one dollar. But in real terms, $2 is just $1 more than $1. Yes, it is a 100% increase, but its only an increase in real terms of $1. The point is you need to look at changes in numbers in real, absolute terms not just in percentage terms. And here are some examples of what I mean in the context of Roseville property taxes: . If the Council chose not to increase Roseville's property tax levy at all in 2006, Roseville property taxes per household would actually decrease This is because new tax base is created each year and the total assessed value of some property in the City increases each year. Therefore, on av- erage less tax from each household is necessary to create the same total tax levy in 2006 as in 2005. Hence, when the City's levy increase is 0%, City taxes actually fall. (Note: This assumes the Ramsey County Assessor does not negate this decrease by increasing the assessed value of your property relative to other property, But even if the Ramsey Assessor in- creases the value of your property, how your taxes are impacted depends on how much your property value changes relative to other property in Roseville; your Roseville property taxes could still fall if your assessed value is increased less relative to the increase in assessed value of other . Roseville property.) . If the Council chose to increase Roseville's property tax levy by 5% in 2006, taxes on the average Roseville home would increase approximately $20 over the course of a year -- or roughly $1.50 more in taxes each month. Yes, the property tax levy is increasing:5%, but. it is 5% of a relatively small number ( approximately $400) arid, hence; the actual impact annu- ally or monthly is also small-- $20 per year or $1.50 per month.' . If the Council chose to increase Roseville's property tax levy by 10% in 2006, taxes on the average Roseville home would increase approximately $34 over the course of a year - or roughly $3 more per household per month. . If the Council chose to increase Roseville's property tax levy by 15% in 2006, taxes on the average Roseville home would increase approximately $41 over the course of the year - or roughly $4.50 more per household per month. Even though Roseville has low taxes, and percentage increases on that low num- ber produces a relatively small increase, Roseville residents do not have low me- dian incomes. The median per capita income of Roseville residents is higher than average as compared with other cities in the Twin Cities metropolitan area. Here are the data. 10