06-09-1997 Council Packet - Laserfiche WebLink

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I t n Tax Capacities and Rates 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. As an example, for residential homestead property, the Hrst $72,000 of market value has a tax capacity of I % and the remaining value has a tax capacity of 2%. Each property classification has a different calculation and uses different rates. Although it is impossible to consider every aspect and variable of local government spending, average tax rates are often used as a benchmark. The following rates are expressed as a percentage of tax capacity: Rates exprc'»/B.'d as a percentage of tax capacity Average City Tax Rate Average County Tax Rate Average School Tax Rate 1995 1996 1995 19%1995 19% All cities statewide 26.6 26.4 37.5 36.8 65.0 63.3 Meu-o area cities 23.9 23.1 36.9 35.8 67.5 64.9 City of Orono *15.6 14.7 37.5 37.3 65.6 62.9 * For the City of Orono. 19% and 1995. average special tax rates were 8.43% and 8.69%. respectively. As the above table indicates, the City of Orono’s average tax rate remains well below both the statewide and metro area average. The Citizens League and Minnesota Taxpayers Association issued a report named Minnesota Homestead Property Tax Review 1996 . Orono’s average estimated market value for homes was over $259,000, the second highest in the survey and more than double the metro average. The higher the average property value, the larger the percentage of the property being taxed at the 2% tax capacity rate discussed above. Consequently. Orono had one of die highest total taxes on average value homes of the 105 metropolitan communities in the survey. This report also compared property taxes on a $105,000 home for each of the same 105 metropolitan communities. The table below shows how property taxes on Orono residents compare to the average on this basis. Tax on $105,000 home in 105 Metropolitan Communities Orono Metro Residents Average Rank * City taxes $203 $ 321 93rd out of 105 cities County taxes 514 495 lOlh out of 18 counties School taxes 867 932 40th out of 50 sch(N)l districts Special district taxes 116 72 6th out of 65 special districts $1.700 $ 1.820 78th out of 105 cities Rank #1 is highc.si taxes and #105 is U'west -5-