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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 a 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 8.2 percent for 2019 and 8.4 percent for 2020. <br />The following graph shows the City's change in tax capacities over the past 10 years: <br />$35,000,000 <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 />2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 <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 />City of Ramsey <br />2018 2019 2020 <br />Average tax rate <br />City 41.7 40.4 39.6 <br />County 35.8 34.9 33.5 <br />School 18.4 16.3 16.9 <br />Special taxing 4.9 4.6 4.4 <br />Total 100.8 96.2 94.4 <br />The school tax rate for Independent School District No. 11, Anoka -Hennepin, was used for the above <br />table. <br />The improvement in tax capacity values previously discussed, contributed to the decrease in the City's <br />average tax rate presented in the table above. <br />-7- <br />