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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 its tax base that is in each property classification from year-to-year, as well as legislative <br />changes to tax rates. The City's tax capacity increased 6.2 percent for 2017 and 10.3 percent for 2018. <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 />$5,000,000 <br />$— <br />Tax Capacity Value <br />2009 <br />1 <br />1 <br />1 <br />2010 2011 2012 2013 2014 2015 2016 2017 2018 <br />The following table presents the average tax rates applied to city residents for each of the last three levy <br />years: <br />Rates Expressed as a Percentage of Net Tax Capacity <br />Average tax rate <br />City <br />County <br />School <br />Special taxing <br />Total <br />City of Ramsey <br />2016 2017 2018 <br />43.3 42.5 41.7 <br />39.4 37.3 35.8 <br />20.9 18.6 18.4 <br />5.5 5.1 4.9 <br />109.1 103.5 100.8 <br />The school tax rate for Independent School <br />above table. <br />The increase previously discussed for market <br />the overall reduction in the average tax rate. <br />District (ISD) No. 11, <br />value and tax capacity <br />Anoka -Hennepin, was used for the <br />value within the City, contributed to <br />-6- <br />