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PROPERTY TAXES
<br />Minnesota cities rely heavily on local property taxes to support governmental fund activities. In the 2025
<br />fiscal year, property taxes provided 69.5 percent of the City's total governmental funds revenue.
<br />The City's taxable market value increased 9.1 percent for taxes payable in 2024 and decreased 0.9 percent
<br />for taxes payable in 2025. The following graph shows the City's changes in taxable market value over the
<br />past 10 years:
<br />$5,000,000,000
<br />$4,500,000,000
<br />$4,000,000,000
<br />$3,500,000,000
<br />$3,000,000,000
<br />$2,500,000,000
<br />$2,000,000,000
<br />$1,500,000,000
<br />$1,000,000,000
<br />$500,000,000
<br />$-
<br />Taxable Market Value
<br />2016
<br />2017 2018 2019 2020 2021 2022 2023 2024 2025
<br />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 12.8 percent and decreased 1.0 percent for taxes
<br />payable in 2024 and 2025, respectively.
<br />The following graph shows the City's change in tax capacities over the past 10 years:
<br />$60,000,000
<br />$50,000,000
<br />$40,000,000
<br />$30,000,000
<br />$20,000,000
<br />$10,000,000
<br />$-
<br />Local Net Tax Capacity
<br />2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
<br />-7-
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