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PROPERTY TAXES <br />Minnesota cities rely heavily on local property tax levies to support their governmental fund activities. In <br />recent years this dependence has been heightened, as revenue from state aids and fees related to new <br />development have dwindled due to the struggling economy. This has placed added pressure on local <br />taxpayers already beset by higher unemployment, lower property values, and tighter credit markets. As a <br />result, municipalities in general are experiencing increases in tax delinquencies, abatements, and <br />foreclosures. This instability has led to significant fiscal challenges for many local governments, and <br />increased the investing public's concerns about the security of the municipal debt market. <br />Property values within Minnesota cities experienced average decreases of 3.0 percent and 5.7 percent for <br />taxes payable in 2010 and 2011, respectively, reflecting the weak housing market and economic <br />conditions experienced in recent years. In comparison, the City's market value decreased 7.6 percent in <br />2010 and 9.6 percent in 2011. It is important to remember that the 2011 market value is based on <br />estimated values as of January 1, 2010, and the housing market is still experiencing difficult times. <br />The following graph shows the City's changes in taxable market value over the past 10 years: <br />$2,500,000,000 <br />$2,000,000,000 <br />$1,500,000,000 <br />$1,000,000,000 <br />$ 500,000,000 <br />$— <br />Taxable Market Value <br />2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 <br />