04-30-1991 Council Minutes Board of Review

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1991 BOARD OF REVIEW = APRIL 30, 1991 The 1991 Board of Review met on Tuesday, April 30, 1991. Mayor Peterson called the meeting to order at 7:00 p.m. Councilmembers Goetten, Callahan, Jabbour and Butler were present. Representing the City were Mark Bernhardson, City Administrator; Rolf Erickson, City Assessor; Dave Wilde and Paul Kingsbury Assistant City Assessors; and Teri Naab, Recorder. Don Monk represented Hennepin County Assessor's staff. Mayor Peterson introduced Newell Weed, Chairman of the Lake Minnetonka Area Tax Committee. He is also on the Fair Share Board of Directors. Mr. Weed gave a brief presentation on the Lake Minnetonka Area Tax Committee and what they have been diligently working on. Basically, they would like to see changes in the three tier system that Minnesota currently uses. He notes that the reason for property taxes is to pay for services and those services are provided equally to those in homes valued at a lower rate, the same as those valued at a higher rate. Therefore, -the percentage must be equalized so all are paying the same rate for the same services. Also, they are working on a bill which would alleviate the excessive rate being charged to seniors or those on fixed, low incomes. City Administrator Bernhardson explained the job of the assessors was to best ref lect the value they put on a property for market value in relationship to what that property would actually sell for:. He further noted that as Mr. Weed had explained the valuation is only one part of the system and another portion of the tax system is the classification system which assesses 1 to 3% on the property, depending upon the value of the property. Another feature which comes under the heading of the "Minnesota Miracle" from the early 1970s, is the school aids /local government aids formula which redistributes money throughout the State taking money from incoming sales tax and "subsidizing low value areas at the detriment of local communities. The seven county area has about 50% of the population, 64 -65% of the taxes in incoming sales are generated in the metro area. The metro area receives only about 46% of those taxes back. The perception from the out -state people is that this is an urban area and all the money is coming into the metro area, when in fact, through the State system just the oposite is taking place. The Minnesota Miracle has three fallacies: property value reflects the ability to pay; need for service is the same throughout the State; and the cost of producing those services is the same throughout the State. Bernhardson thanked Mr. Weed for mentioning that the City of Orono's portion of the tax bill makes up only a small part of the tax bill, this year 12% and the City Council works hard to keep it the lowest tax capacity of any city in Hennepin County over 1,000 in population. Mr. Bernhardson also explained the "Circuit Breaker" whereby persons may apply for a refund on their taxes if they raised over 10% last year. 1