Yes, in the past, cutting the tax classification rate has resulted in a
smaller tax base for the City of Minneapolis. This is how we have had the
conundrum that folks were talking about six months ago, why in this era of
wildly increasing property values, the City was working from a cutting back
budget. The last year I was involved with the budget, the City itself took
a $9 million hit from changes in classification rates. This was mitigated
for the schools, I believe, through higher state aides. I don't know the
impact on the counties.
The class rate reductions put in place over the last several years have been
basically for all property types except middle and lower value homes.
Higher values homes, commercial, and rental properties have all had
reductions in their property taxes (if you hold constant for value). Once
again, the debate at the legislature is how to cut taxes even more for
higher value homes, commercial and rental. The Strib had a table a while
back showing the reductions. The result of this is to shift more of the
tax burden to lower and middle value residential property.
If anyone wants me to go into more detail about how this exactly works, drop
me a line and I'll drop you back a little primer on the details of the
property tax.
Carol Becker
Longfellow
----- Original Message -----
From: David Brauer <[EMAIL PROTECTED]>
To: Mpls list <[EMAIL PROTECTED]>
Sent: Tuesday, May 29, 2001 8:06 AM
Subject: [Mpls] Mn property tax reform & Minneapolis
> I'm curious how the property tax deal cut between the governor and
> legislative leaders affects Minneapolis finances. Reports characterize the
> deal as "lowering & flattening" property tax rates - particularly for
> apartments and businesses, but also a dramatic cut for higher-valued
homes.
> Currently, homeowners pay 1 percent of assessed value up to $76,000, and
> 1.65 percent of assessed value over that. In the new deal, everyone pays 1
> percent up to $500,000 and 1.25 percent above that.
>
> My question: if the rates are property tax rates are sliced, and the city
> treasury relies quite a bit on property taxes, doesn't this the city
> treasury takes a big hit? Perhaps the city's property tax slice is
> independent of the doings at the capitol. Can someone in the know explain
> how it all fits together?
>
> David Brauer
> King Field - Ward 10
>
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