Agenda - Parks and Recreation Commission - 12/14/1989

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1) Where do my taxes go? Approximately 43% of file city's operating dollars for police, parks, roads, sewer and water systems, city hall facility, land use planning, etc., come from property taxes that residents pa3'. The expenditures of the city are broken down into general governmenl (42%), public safety (32%), public works (14%), culture and recreation (7.2%) and reserves and debt (3.7%). Major purchases are called capital outlay expenditures. The city's capital outlay for 1990 is broken down as follows: general government (2.3%), ptJblic works (53.7%), public safety (16.3%), culture and recreation (27.7%). The proposed 1990 budget consists of 2.5 million dollars for capital outlay, debt service and general operating expenditures. The remainder of the property taxes are used for education, county and regional services. Thc property tax statement indicates each of those categories and the amount of dollars that goes to each one of those respective governments. 2) YVimt changed from last year to cause the City to publish a 17.7% increase? The legislature adopted a shift in dollars from the cities and counties to the school districts. In 1989, 54.5% of the property tax dollars paid went to the school district, 14.7% went to the city, 29% when to the county and 1,6% went to special districts. In 1990, that distribution will be 40% to the school district, 19.2% to the city, 37% to the county and 2% to special districts. However, the school district will not be shorted as it will be receiving more funds in the form of local government aid from the State and as a general rule, those funds are derived from income taxes. The net effect of the shift in dollars is an overall reduction of 2.1% in the levy limits adopted by Ramsey, Anoka County and Anoka Hennepin School District. Property taxes are based on property classification and the 1989 legislature also made changes to the property classifications. As a result of the classification changes, no impact is anticipated to a homesteaded property valued at $50,000; a 12% reduction is anticipated for homestead property valued at $100,000 and a 10% reduction for property valued at $300,000. Agriculture homestead has been combined with agriculture production property and as a result of the changes in classifications, they will see an increase of about 24% if their property is valued at $50,000, 2% for property valued at $100,000 and 29% for property valued at $300,000. 3) Who changed it? The shift in education dollars and the classification changes were made by the legislature. The local levies are established by the local units of government (city, county, school district). l',4r. Hartley noted that major improvements can change property value and result in a change in property taxes. The city's total valuation also affects property taxes; if there is a larger ~oup of people to spread the dollars across, an individual's share of the overall tax burden will less; Ramsey's property valuation will probably increase from $20,000,000 to $27,000,000. City Council Public Hearin~ovember 14, 1989 Page 2 of 3