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Tax capacity is considered the actual base available for taxation. It is calculated by applying the state's <br />property classification system to each property's market value. Each property classification, such as <br />commercial or residential, has a different calculation and uses different rates. Consequently, a city's total <br />tax capacity will change at a different rate than its total market value, as tax capacity is affected by the <br />proportion of the City's tax base that is in each property classification from year-to-year, as well as <br />legislative changes to tax rates. The City's tax capacity decreased 9.1 percent for 2013 and increased <br />9.1 percent in 2014. The City had a large tax increment financing district that was decertified at the end of <br />2013, contributing to the increase in the 2014 taxable tax capacity presented in the graph below. <br />The following graph shows the City's change in tax capacities over the past 10 years: <br />$30,000,000 <br />$25,000,000 <br />$20,000,000 <br />$15,000,000 <br />$10,000,000 <br />$5,000,000 <br />Local Net Tax Capacity <br />2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 <br />The following table presents the average tax rates applied to city residents for each of the last two levy <br />years, along with comparative state-wide and metro area rates. <br />Rates expressed as a percentage of net tax capacity <br />All Cities <br />Seven -County <br />City of <br />State -Wide <br />Metro Area <br />Ramsey <br />2013 2014 <br />2013 <br />2014 <br />2013 2014 <br />Average tax rate <br />City <br />48.8 48.8 <br />46.1 <br />46.0 <br />44.2 44.2 <br />County <br />48.5 47.6 <br />47.1 <br />46.6 <br />44.8 43.6 <br />School <br />28.5 28.9 <br />30.3 <br />30.9 <br />29.7 30.8 <br />Special taxing <br />7.2 7.3 <br />9.4 <br />9.5 <br />4.9 6.9 <br />Total <br />133.0 132.6 <br />132.9 <br />133.0 <br />123.6 125.5 <br />The school tax rate for the City represents an average of Independent School District (ISD) No. 11, <br />Anoka -Hennepin and ISD No. 728, Elk River Area Schools. <br />As presented in the table above, the average tax rates for the City and other taxing authorities are similar <br />to the state-wide and metro area averages. In total, the City is below both averages for both the current <br />year and prior year presented. <br />-5- <br />