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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 7.3 percent for 2021 and increased 11.0 percent for <br />2022. <br />The following graph shows the City's change in tax capacities over the past 10 years: <br />$40,0001000 <br />$ 3 5, 000,000 <br />$30,000,000 <br />$2500,000 <br />$20,0001000 <br />$1500,000 <br />$10, 000,000 <br />$5,000,000 <br />Tax Capacity Value <br />2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 <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 />2020 2021 2022 <br />Average tax rate <br />City <br />39.6 <br />39.3 <br />42.2 <br />County <br />33.5 <br />31.6 <br />29.6 <br />School <br />16.9 <br />16.2 <br />16.3 <br />Special taxing <br />4.4 <br />4.2 <br />4.1 <br />Total <br />94.4 <br />91.3 <br />92.2 <br />The school tax rate for Independent School District No. 11, Anoka -Hennepin, was used for the above <br />table. <br />The overall increase in the average tax rate was largely in the City tax rate with the increase in the <br />approved levy. This increase was largely due to the City's new Pavement Management Levy, which was <br />approved and implemented in the current year to replace the collections of franchise fees that ended in <br />fiscal year 2022. <br />-7- <br />