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Home My WebLink About1995-11-22_TRUTH IN TAXATIONMEMORANDUM DATE: November 22, 1995 TO: Mayor and Council FROM: Gordon L. Hughes Assistant City Manager SUBJECT: TRUTH IN TAXATION HEARING Enclosed is a packet concerning the 1996 Edina City Budget. This packet as well as a summary of the budget will be available to everyone attending the November 29, 1995, Truth in Taxation hearing. We will also have copies of the full budget for those individuals who desire more detailed information. TRUTH IN TAXATION /BUDGET ADOPTION PROCESS The official Truth in Taxation hearing is scheduled for November 29, 1995. If the Council wishes, the hearing may be continued until December 15, 1995. The Council may not adopt the final budget and final property tax levy at the Truth in Taxation hearing. After the close of the Truth in Taxation hearing, the Council must announce the time and place of the meeting at which they will consider adoption of the final budget and final property tax levy. This budget adoption meeting may not occur less than 24 hours after completion of the Truth in Taxation hearing. If the Council concludes on November 29 that an adequate opportunity has been afforded to all desiring to be heard, it should proceed to adopt a motion closing the hearing. The Council should then formally establish a time for the consideration of the final budget and property tax levy. Staff would recommend that this consideration be given at the Council's regularly scheduled meeting of December 4, 1995. If the Council wishes, it may further continue the final budget and property tax levy consideration until the December 19, 1995, City Council meeting. The Council need not consider the budget and the levy at a regularly scheduled meeting, although this has been the Council's past practice. If the Council wishes to continue the Truth in Taxation hearing until December 15, 1995, the final budget and final levy would presumably not be considered until December 19, 1995. Please call if you have any questions concerning the attached materials. We will be happy to prepare additional materials at your request. �1 o e o Facts Concerning the 1996 Edina City Budget v .by • ,�^nrOM1� nnx Q. What is the dollar amount of the proposed City expenditures for 1995 and 1996? A. 1995 1996 $15,723,228 $16,504,290 Q. How much of an increase is this from the current year? A. $781,062 or 4.97% Q. How much do taxes need to increase from 1995 to support the 1996 City Budget? A. 6.91 %. A substantial portion of the tax increase this year is due to a reduction in a couple of funding sources: a. $100,000 reduction in the State paid Homestead and Agricultural Credit (HACA) and b. $50,000 reduction in municipal court fines. Q. What are the major categories of City Spending? A. Expenditures by Type Salaries 54.6% Contr. Svcs. 12.3' Commodities 5.0% Reserves 0.5% Equipment 6.4% Cent. Svcs. 21.2% Expenditures by Area Public Works 23.7% Public Safety 48.0 Gen. Govt 13.8% Parks 12.4% % -Dept 2.1% N A. L1 What are the sources for City revenues? Taxes TIA Revenues by Type Other Revenue 3.0% Fees & Charges 8.3% Ines & Forfeitures 2.3% "t. Aid 8.6% Lie. & Permits 5.9% How are taxes determined for my home? A. For an owner - occupied house or condominium: The first step is to multiply the 1995 assessor's estimated market value (EMV) of your home by the "class rates" imposed by State Law. The result is known as your home's "tax capacity" (i.e. its taxable value). (The class rates for owner - occupied housing are 1 % for the first $72,000 of market value and 2% for the market value in excess of $72,000.) The next step is to multiply the tax capacity by the extension rate (i.e. tax rate) calculated for each taxing jurisdiction based upon their proposed expenditures. The result is your tax bill. Example $150,000 Home in the Edina School District $ 72,000 x 1% _ $ 720 $ 78,000 x 2% $1,560 Tax Capacity 2,280 Extension Rate x 123.696% Tax $2,820.27 Plus - School Bond Levy Market Value $150,000 Referendum Rate x.12527% School Bond Tax $187.91 Total Taxes on Home $3,008.18 Q. The City's Tax Rate increased 4.69 %, but my tax increase was more. Why did this happen? A. Other factors can contribute to a change in the City portion of your tax bill: a. Changes in the value of your property in relation to other properties b. Minnesota's progressive tax rate structure on residential property While the City's tax rate increased 4.69% for 1996, it decreased 3.14% for 1995. Example $100,000 single family home with a 3% increase in value has a 4.69% increase in Tax Capacity and a 9.59% increase in City Taxes Tax Capacity Calculation 1994 Value 100,000 = (72,000 x 1.0 %) + (28,000 x 2.0 %) _ (720) + (560) = 1,280 Tax Capacity City Tax Calculation = Tax Capacity x City Tax Rate = 1,280 x 15.577% = 1995 City Taxes of $199.39 Tax Capacity Calculation 1995 Value 103,000 = (72,000 x 1.0 %) + (31,000 x 2.0 %) _ (720) + (620) = 1,340 Tax Capacity City Tax Calculation = Tax Capacity x City Tax Rate = 1,340 x 16.307% = 1996 City Taxes of $218.51 Value Increase = 3% Tax Capacity Increase = 4.69% City Tax Increase = 9.59% Q. The assessor's market value of my property seems too high. Can this be lowered? A. Taxes payable in 1996 are based upon the assessor's valuation of your property on January 2, 1995. This value cannot be changed. The 1996 valuation of your property will be sent to you this winter and will be the basis for your 1997 tax bill. That valuation may be discussed with or appealed to the assessor upon receipt and /or appealed to the Board of Review (City Council) in April. Q. Where does my tax dollar go? A. 1995 Proposed Tax Distribution Local Schools* 49% ° ^^ °pin County 3201 * - School Percentage Does Not Include Bond Levy City of Edina 13% metro a waiersnea a i° 1996 Budggt - Truth in Taxation Examples of Impact on Select Edina Homesteads by Proposed 1996 Tax Budget Payable 1996 1996 Market 1995 Proposed % 1995 Proposed % Value Total Tax Total Tax Change City Tax City Tax Change 60,000 707 742 4.95% 93 98 4.69% 100,000 1,509 1,583 4.95% 199 209 4.69% Median Value All Residential 148,700 2,656 2,788 4.95% 351 368 4.69% Average Value All Residential 153,000 2,758 2,894 4.95% 365 382 4.69% Median Value Single Family 168,500 3,123 3,278 4.95% 413 432 4.69% Average Value Single Family 196,500 3,783 3,971 4.95% 500 523 4.69% 300,000 6,223 6,531 4.95% 822 861 4.69% 500,000 1 10,937 1 11,479 4.95%1 1,446 1 1,513 1 4.69% 1996 Budget -.Truth in Taxation ASSUMES NO INCREASE IN MARKET VALUE 1995 1996 1995 1996 City Rate City Rate Total Rate' Total Rate" 15.577% 16.307% 117.857% 123.696% Payable Market Value 1995 Tax Capacity 1996 Tax Capacity 1995 Total Tax 1996 Prop Total Taxes % Change 1995 City Taxes 1996 Proposed City Taxes % Change Notes 50,000 500 500 589 618 4.95% 78 82 4.69% Median Value - All Residential Average Value - All Residential Median Value - Single Family - Family 60,000 600 600 707 742 4.95% 93 98 4.690 70,000 700 700 825 866 4.95% 109 114 4.69% 80,000 880 880 1,037 1,089 4.95% 137 144 4.69% 90,000 1,080 1,080 1,273 1,336 4.95% 168 176 4.69% 100,000 1,280 1,280 1,509 1,583 4.95% 199 209 4.69% 110,000 11480 1,480 1,744 1,831 4.95%1 231 241 4.69% 120,000 1,680 1,680 1,980 2,078 4.95% 262 274 4.69% 130,000 1,880 1,880 2,216 2,325 4.95%1 293 307 4.69% 140,000 148,700 150,000 153,000 160,000 168,500 170,000 2,080 2,254 2,280 2,340 1 2,480 2,650 21680 2,080 2,254 2,280 2,340 1 2,480 2,650 1 2,680 2,451 2,656 2,687 2,758 1 2,923 - 3,123 1 3,159 2,573 21788 1 2,820 2,894 1 3,068 3,278 3,315 4.95%1 4.95% 4,95%1 4.95% 4.9576 4.95% 1 4.95%1 324 351 355 365 386 413 417 339 368 1 372 382 1 _1z 432 1 437 4.69% 4.69% 4.697o 4.69% 4.69% 4.69% 1 4.69% 180,000 2,880 2,880 3,394 3,562 1 4.95%1 4491 470 1 4.69% 190,000 196,500 200,000 3,080 1 3,280 3,080 1 3,280 3,630 3,866 3,810 41 057 4.95% 4.95% 480 00 511 502 535 1 4.69% 4.69% 210,000 3,480 3,480 4,101 4,305 4.95% 542 567 4.690/6 220,000 3,680 3,680 4,337 4,552 4.95% 573 600 4.690/6 230,000 3,880 3,880 4,573 4,799 4.95% 604 633 4.69% 240,000 4,080 4,080 4,809 5,047 4.95% 636 665 4.69% 250,000 4,280 4,280 5,044 5,294 4.95% 667 698 4.69% 260,000 4,480 4,480 5,280 5,542 4.95% 698 731 4.69% 270,000 4,680 4,680 5,516 5,789 4.95% 729 763 4.69% 280,000 4,880 4,880 5,751 6,036 4.95% 760 796 4.69% 290,000 5,080 5,080 5,987 6,284 4.950/6 791 828 4.69% 300,000 5,280 5,280 6,223 6,531 4.95% 822 861 4.69% 310,000 5,480 5,480 6,459 6,779 4.95%1 854 894 4.69% 320,000 5,680 5,680 6,694 7,026 4.95% 885 926 4.69% 330,000 5,880 5,880 6,930 7,273 4.95% 916 959 4.69% 340,000 6,080 6,080 7,166 7,521 4.95% 947 991 4.69% 350,000 6,280 6,280 7,401 7,768 4.95% 978 1,024 4.69% 360,000 6,480 6,480 7,637 8,016 4.95% 1,009 1,057 4.69% 370,000 6,680 6,680 7,873 8,263 4.95%1 1,041 1,089 4.69% 380,000 6,880 6,880 8,109 8,510 4.95% 1,072 1,122 4.69% 390,000 7,080 7,080 8,344 8,758 4.95% 1,103 1,155 4.69% 400,000 7,280 1 7,280 8,580 9,005 4.95% 1,134 1,187 4.69% 410,000 7,480 7,480 8,816 9,252 4.95% 1,165 1 1,220 4.69% 420,000 7,680 7,680 9,051 9,500 4.95% 1,196 1,252 4.69% 430,000 7,880 7,880 9,287 9,747 4.95% 1,227 1,285 4.69% 440,000 8,080 8,080 9,523 9,995 4.95% 1,259 1,318 4.696 450,000 8,280 8,280 9,759 10,242 4.95% 1,290 1,350 4.69% 460,000 8,480 8,480 9,994 10,489 4.95% 1,321 1,383 4.69% 470,000 8,680 8,680 10,230 10,737 4.95% 1,352 1,415 4.69% 480,000 8,880 8,880 10,466 10,984 4.95% 1,383 1,448 4.6906 490,000 9,080 9,080 10,701 11,232 4.95% 1 1,414 1,481 4.69% 500,000 9,280 9,280 10,937 11,479 4.95%1 1,446 1,513 4.69% • - TOTAL RATE BASED ON SCHOOL DISTRICT 273 -1, EXCESS REFERENDUM LEVY NOT INCLUDED 1996 Budget - Truth in Taxation Examples of Impact on Select Edina Homesteads by Proposed 1996 Tax Budget 1995 1996 Payable Payable 1996 1996 Market Market 1995 Proposed % 1995 Proposed % Value Value Total Tax Total Tax Change City Tax City Tax Change 60,000 61,800 707 764 8.10% 93 101 7.83% 100,000 103,000 1,509 1,658 9.87% 199 219 9.59% Median Value All Residential 144,369 148,700 2,554 2,788 9.15% 338 368 8.87% Average Value All Residential 148,544 153,000 2,653 2,894 9.11% 351 382 8.83% Median Value Single Family 163,592 168,500 3,008 3,278 8.99% 398 432 8.71% Average Value Single Family 190,777 196,500 3,648 3,971 8.84% 482 523 8.56% 300,000 309,000 6,223 6,754 8.53% 822 890 8.26% 500,000 1 515,000 1 10,937 1 11,850 1 8.35% 1,446 1,562 8.07% 1996 Budget - Truth in Taxation 1995 1996 1995 1996 City Rate City Rate Total Rate Total Rate' 15.577% 16.307% 117.857% 123.696% 1995 Payable Market Value 1996 Payable Market Value" 1995 Tax Capacity 1996 Tax Capacity % Change Tax Cap 1995 Total Tax 1996 Prop Total Taxes % Change 1995 City Taxes 1996 Proposed City Taxes % Change Notes 40,000 41,200 400 412 3.00% 471 510 8.10% 62 67 7.83% Residential Average Value - All Residential Median Value - Single Family Av.- Value -Single Family 50,000 51,500 1 500 515 3.00%1 589 637 8.10% 78 84 7.83% 60,000 61,800 600 618 3.00% 707 764 8.10%1 93 101 7.83% 70,000 72,100 700 722 3.14% 825 893 8.25% 109 118 7.98% 80,000 82,400 880 928 5.45% 1,037 1,148 10.68% 137 151 10.40% 90,000 92,700 1,080 1,134 5.00% 1,273 1,403 10.20% 168 185 9.92% 100,000 103,000 1,280 1,340 4.69% 1,509 1,658 9.87% 199 219 9.59% 110,000 113,300 1,480 1,546 4.46% 1,744 1,912 9.63% 231 252 9.35% 120,000 123,600 1,680 1,752 4.29% 1,980 2,167 1 9.45%1 262 286 9.17% 130,000 133,900 1,880 1,958 4.15% 2,216 2,422 1 9.31%1 293 319 140,000 144,369 150,000 144,200 1' 148,700 r00 1 154,500 2,080 2,167 ----2,251 1 2,280 2,164 2,254 2,340 1 2,370 4.040%/. 4.00% 3.96% 3.95%1 2,451 2,653 2,687 2,677 2,894 1 2,932 9.19% 9.11% 9.10%1 324 351 355 353 382 1 386 8.91% 8.83% 1 8.82% 160,000 110,000 L 164,800 168,500 1 175,100 2,480 1 2,680 1 2,576 1 2,782 3.87% 1 3.81%1 2,923 ri: 3,159 1 3,278 1 3,441-1 9.02% 8.99% 8.95% 386 398 1 417 420 432 454 8.74% 8.71% 8.67% 180,000 1 185,400 1 2,880 1 2,988 1 3.75%1 3,394 1 3,696 8.89% 487 8.61% 190,000 200,000 195,700 196,500 206,000 3,080 3,096 3,280 3,194 3,210 3,400 3.70% 3.70% 1 % 3630 3,648 3,866 3951 3,971 1 4,206 884% 8.84% 8.79% �49 482 511 521 523 554 8.56% 8.56% 8.52% 210,000 216,300 3,480 3,606 3.62% 4,101 4,460 8.75% 542 588 8.48% 220,000 226,600 3,680 3,812 3.59% 4,337 4,715 8.72% 573 622 8.44% 230,000 236,900 3,880 4,018 3.56% 4,573 4,970 8.69% 604 655 8.41% 240,000 247,200 4,080 4,224 3.53% 4,809 5,225 8.66% 636 689 8.38% 250,000 257,500 4,280 4,430 3.50% 5,044 5,480 8.63% 667 722 8.36% 260,000 267,800 4,480 4,636 3.48% 5,280 5,735 8.61% 698 756 8.33% 270,000 278,100 4,680 4,842 3.46% 5,516 5,989 8.59% 729 790 8.31% 280,000 288,400 4,880 5,048 3.44% 5,751 6,244 8.57% 760 823 8.29% 290,000 298,700 5,080 5,254 3.43% 5,987 6,499 8.55% 791 857 8.27% 300,000 309,000 5,280 5,460 3.41% 6,223 6,754 8.53% 822 890 8.26% 310,000 319,300 5,480 5,666 3.39% 6,459 7,009 8.52%1 854 924 8.24% 320,000 329,600 5,680 5,872 3.38% 6,694 7,263 8.50% 885 958 8.23% 330,000 339,900 5,880 6,078 3.37%1 6,930 7,518 8.49% 916 991 8.21% 340,000 350,200 6,080 6,284 3.36% 7,166 7,773 8.48% 947 1,025 8.20% 350,000 360,500 6,280 6,490 3.34% 7,401 8,028 8.46% 978 1,058 8.19% 360,000 370,800 6,480 6,696 3.33% 7,637 8,283 8.45% 1,009 1,092 8.18% 370,000 381,100 6,680 6,902 3.32% 7,873 8,537 8.44%1 1,041 1,126 8.17% 380,000 391,400 6,880 7,108 3.31% 8,109 8,792 8.43%1 1,072 1,159 8.16% 390,000 401,700 1 7,080 7,314 3.31%1 8,344 9,047 8.42%1 1,103 1,193 8.15% 400,000 412,000 7,280 7,520 3.30% 8,580 9,302 8.41% 1,134 1,226 8.14% 410,000 422,300 7,480 7,726 3.29% 8,816 9,557 8.41% 1,165 1,260 8.13% 420,000 432,600 7,680 7,932 3.28% 9,051 9,812 8.40% 1,196 1,293 8.12% 430,000 442,900 7,880 8,138 3.27% 9,287 10,066 8.39% 1,227 1,327 8.11% 440,000 453,200 8,080 8,344 3.27% 9,523 10,321 8.38% 1,259 1,361 8.11% 450,000 463,500 8,280 8,550 3.26% 9,759 10,576 8.38% 1,290 1,394 8.10% 460,000 473,800 8,480 8,756 3.25% 9,994 10,831 8.37% 1,321 1,428 8.09% 470,000 484,100 8,680 8,962 3.25% 10,230 11,086 8.36% 1,352 1,461 8.09% 480,000 494,400 8,880 9,168 3.24% 10,466 11,340 8.36% 1,383 1,495 8.08% 490,000 5041700 9,080 9,374 3.24% 10,701 11,595 8.35% 1,414 1,529 8.08% 500,000 515,000 9,280 9,580 3.23%1 10,937 11,850 8.35%1 1,446 1,562 8.07% 510,000 1 525,300 9,480 9,786 1 3.23%1 11,173 12,105 1 8.34%1 1,477 1,596 8.07% - TOTAL RATE BASED ON SCHOOL DISTRICT 273 -1, EXCESS REFERENDUM LEVY NOT INCLUDED SCHOOL DISTRICT BOUNDARIES Hopkins School District ( #270) 1:1 Richfield School District ( #280) El EGINA -_ - 1Y• -_ I K- .I.. ujr rYE "•'••^ ? 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