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Memorandum <br />City Council <br />City of Ramsey <br />February 20, 1975 <br />Page Two <br /> <br />b) The present 5% limit on increases in market value of <br />homes creates inequities'between individual property owners <br />within the same community and also creates inequities between <br />communities that contribute to the same overlapping taxing <br />districts, such as the school district, county, metro, etc.. <br />As a result of inflation, assessors in Anoka County are.using <br />guidelines based on sales ratios which result in actual market <br />value increases since the limit was imposed of between 20% and <br />30%, including proposed 1975 changes. 'The 5% limit per year <br />results in taxable value increases of only 15% and the limit <br />does not apply to new construction. Using actual cases in the <br />City of Ramsey this law can result in a tax difference between <br />identical market value homes in excess of $200.00 per year, <br />depending on when. the home was constructed. This inequity <br />should be removed. Further, communities within the school <br />district and the County which have subst'antial numbers o'f <br />new homes constructed are paying more than their share of <br />taxes because of the arbitrary limitation on existing homes <br />but not on new construction. <br /> <br />It should be noted that removal of the limit without some <br />limitation on the amount of tax increase will. also create <br />problems which should be considered in drafting changes in <br />the current system. Removal of the 5% limitation inequity <br />should be staged so that individual hardships do not occur <br />during the transition back to a system based on real market <br />value. <br /> <br />That the City Council support legislation tha~ would remove <br />the current 5% limitation on increases in taxable value of <br />property, provided that such legislation also limit the <br />resulting increase on individual properties. <br /> <br />c) Resources for local governments now are derived from <br />three basic sources: <br /> <br />(2) <br />(3) <br /> <br />State Local Government Aids <br />Federal Revenue Sharing <br />Property Taxes <br /> <br />It is important that both the State and Federal governments <br />maintain their contributions at a pace at least equal to the <br />rate of inflation to prevent further burdens on the property <br />tax to maintain local government services. <br /> <br /> <br />