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MINUTES OF THE ORONO 1991 BUDGET HEARING HELD DECEMBER 3, 1990 OECisssa <br />ATTENDANCE^?.00^P^M. followin£i33^i4}f^RQJjO <br />present: Acting Mayor Edward Callahan and wounciImembers Diann <br />Goetten and Barbara Peterson. Mayor Grabek and Councilmember <br />Nettles were absent. The following represented the City Staff: <br />City Administrator Mark Barnhardson. Building & Zoning <br />Administrator Jeanne Mabusch, Public Works Director John <br />Gerhardson, C. nance Director Tom Kuehn, Police Chie^: Mel Kilbo, <br />and Dorothy Hallin, City Clerk. <br />OPEN PUBLIC HEARING <br />The Affidavit of Publication was duly noted and Acting Mayor <br />Callahan opened the Public Hearing at 7:00 p.m. <br />INTRODUCTORY INFORMATION <br />Bernhardson began by welcoming those in attendance. He then <br />gave a brief explanation of Truth in Taxation. He said, "Truth <br />in Taxation was enacted approximately two years ago by the State <br />of Minnesota. It established certain budget criteria for local <br />government. Last year we v/ere only required to place a notice in <br />the paper. This ye.ir, each property owner received a summary <br />statement regarding the taxes for his/her lurisdiction. There <br />are two school districts prim;»rily in this area, Orono and <br />Westonka. The tax statement for Orono shows that taxes are <br />proposed to increase from $l.v:38,246 to $1,8 5.J,541, or a 13.1% <br />increase. The stateaient also shows the increases proposed for <br />Hennepin County and the Orono School District. To some degree, <br />these statements are misleading. Some people have added the <br />percentages for the City, School District and County together. <br />That is incorrect. The statement is also misleading because <br />Orono taxpayers will not necessarily see a 13.1% increase in <br />their property taxes. Because Orono has experienced growth in <br />its tax base, the actual tax rate may only increase by one or two <br />percent. This means taxes should remain nearly the same, or in <br />some cases, be slightly less. The State of Minnesota has one of <br />the most complicated property tax systems in the Nation. <br />Another issue that is raising concern is talk about <br />Minnesota's three-tier tax system." Bernhardson briefly <br />explained how the three-tier tax system came to be. He said, <br />"The Twin Cities/Metropolitan Area represents 50% of the State's <br />population. The Metropolitan Area collects 64% to 66% of the <br />State's taxes, but receives only 46% or less back. There is <br />disparity. The money comes from this area and is distributed <br />throughout the State. This is mainly due to the school aid <br />formula, aid to a lesser degree, the local government aid <br />formula. The City of Orono has had all of its local government <br />aids taken away because our per capita tax base is too great. <br />Orono has also had all of its homestead credits taken away <br />because our tax base is too strong to qualify under the <br />formulas." (Bernhardson displayed information showing how <br />- 1 -