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Attachment 8 Memo To: Mayor and City Council and Pat Trudgeon, City Manager From: Michelle Pietrick, Finance Director Re: Taxable Property Values At the June 17, 2024, council meeting we provided an update on preliminary 2025 property tax base changes based on data that was available from the County Assessor’s website. The County Assessor’s data is based on overall market value and showed an increase for 2025 of 1.10% over the 2024 market value. These values do not factor in what property is taxable and at what classification of taxability. The County provides us with the total tax capacity of all properties (which is determined by each property’s tax classification rate) and then subtracts the tax increment property values and the amount of value related to the fiscal disparities’ contribution from our commercial properties. The result is our local tax capacity. Our final 2024 local tax capacity property value was $71,587,958. Our estimated 2025 local tax capacity property value is $69,640,693, which is a reduction of $1,947,265 or 2.7%. Attached is a table showing how the property tax impact is determined for the median valued home in Roseville using this data. There are three main contributors to this reduction in the local tax capacity rate: 1.The legislature changed the classification of 4d property to 4d(1) which is an apartment classification for low income housing. Previously there was a two-tiered formula where the first tier was classified at .75% and the second tier has a class rate of .25%. All of these properties are now at one tier of .25% starting for taxes payable in 2025. While this only affected 13 parcels, it reduced our local tax capacity value by about $600,000. 2.Minnesota Statute 273.13 changed the Homestead Market Value Exclusion Calculation. Previously, the exclusion was equal to 40% of the first $76,000 minus 9% of the value between $76,000 to $413,800, with no exclusion for property valued over $413,800. The new exclusion is equal to 40% of the first $95,000 minus 9% of the value between $95,000 to $517,200, with no exclusion for property values over $517,200. This reduced our local tax capacity value by about $700,000 across all homestead parcels. Decreasing the market value of a property reduces the tax burden for a homeowner and shifts the burden to other classes of property such as higher valued homes and commercial/industrial properties. 3.Fiscal Disparity (FD) contribution value for Roseville commercial property is approximately $1.2 million higher for 2025 versus 2024. FD contribution is a subtraction from the tax capacity values used to determine the local tax rate. Qbhf!261!pg!345