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In the first year of implementation (1975), the areawide tax base included 6.7 percent of the total metro C/I tax <br />base and 2.1 percent of the total metro tax base. For 2004, the areawide tax base was 32.3 percent of the total metro <br />C/I base and 9.8 percent of the total metro tax base. <br />How much do fiscal disparities affect tax burdens? <br />A House Research study based on taxes payable in 2004 found that the average homestead tax in St. Paul, which <br />is one of the largest net beneficiaries of the program, was 8.8 percent lower because of fiscal disparities. The study <br />also found that the average homestead tax in Bloomington, which is one of the largest net contributors, was 5.5 <br />percent higher. Homestead effects throughout the area generally varied between these extremes. <br />For commercial- industrial properties, average taxes were 2.7 percent lower in St. Paul due to fiscal disparities and <br />9.7 percent higher in Plymouth, another suburban city that is a large net contributor. Commercial - industrial <br />properties elsewhere in the metro area fall in line between these extremes. <br />The study looked only at the direct effect of fiscal disparities, i.e., the redistribution of tax base, and made no <br />attempt to factor in alternative development patterns that might have occurred without fiscal disparities. <br />How did the 2001 property tax reform affect fiscal disparities? <br />The elimination of the general education levy, imposition of a state property tax levy, and reduction in <br />commercial - industrial class rates caused the nominal amount of money redistributed by the fiscal disparities <br />program to decrease. However, based on the aforementioned House Research study, the net effect of fiscal <br />disparities on tax burdens is similar to what it was before the reform. <br />For more information: Contact legislative analyst Steve Hinze at 651- 296 -8956 or Karen Baker at 651- 296 -8959. <br />Also see the House Research publication Minnesota's Fiscal Disparities Programs: Twin Cities Area and Iron <br />Range. <br />Funding Source: <br />None <br />Council Action: <br />Informational only. <br />Fiscal Disparities <br />Attachments <br />Form Review <br />Inbox Reviewed By Date <br />Kurt Ulrich Kurt Ulrich 10/20/2011 10:20 AM <br />Form Started By: Diana Lund Started On: 10/20/2011 07:18 AM <br />Final Approval Date: 10/20/2011 <br />