The calculation of Mpls property tax bills is as follows:

Assessed Market Value TIMES the "Classification Rate" EQUALS "Tax Capacity"
"Tax Capacity" TIMES the "Extension Rate" EQUALS "The Tax"

Here is the Mpls "Tax Capacity" (TC) and "Market Value" (MV) by year:

1992 - $298,127,000 TC, $13,228,213,000 MV
1993 - $279,553,000 TC, $12,762,454,000 MV
1994 - $284,049,000 TC, $12,694,475,000 MV
1995 - $282,816,000 TC, $12,833,264,000 MV
1996 - $302,651,000 TC, $13,450,363,000 MV
1997 - $278,387,000 TC, $14,215,582,000 MV
1998 - $267,870,000 TC, $15,284,334,000 MV
1999 - $281,161,000 TC, $16,980,768,000 MV
2000 - $308,979,000 TC, $19,383,387,000 MV

2001 - $237,591,000 TC, $23,162,298,000 MV  *****

Comments from Vicky:

In 2001 the total market value increased by $4 billion, but the tax
capacity
dropped by $71 million.  This is because Minneapolis is trying
to keep tax collections level by increasing market values - which is the
only variable the City controls.  The classification rates and
extension rates are determined by the Legislature.

The "classification" rates have been reduced in recent years - which is why
the tax capacity is falling even though the market values are increasing.

Even worse:  The legal DEBT LIMIT of the City is 3 1/3% of MARKET VALUE.
The consequence of this is more and more debt, even though our ability to
collect taxes is dropping.


Vicky Heller
Cedar-Riverside and North Oaks

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