05.03 - 2012 Budget and Levy - Laserfiche WebLink

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STATES ELIMINATION OF MARKET VALUE CREDIT • In 2011 Crow Wing County residents received $3.8 million of market value homestead credit. • $1.6 million of the credit was Crow Wing County's and $2.2 million was the cities, towns, and school district's. • This credit reduced taxpayers net taxes paid to the various local governments. (cities, towns, county, and school district's) • The credit was then paid on behalf of the residents to the local governments by the State of Minnesota. • This credit in recent years has not been paid in full by the state. • In 2011, of the $1.6 million that the state was certified to pay the county, only $840 thousand was received, even though the taxpayers received credits for the entire $1.6 million. • Cities, towns, and school districts also received reduced amounts from the CROW WINiY COUNTY s suivf xn; anv se4ot .` THE NEW EXCLUSION VS. OLD CREDIT •A major difference from the old market value homestead credit statute and calculation, is instead of calculating a credit amount it is calculating a reduction in taxable market value. • The credit that taxpayers received was distributed equally based on value and reduced their tax. The exclusion is reducing their value before applying their rate to calculate their tax. This is providing additional relief to higher combined tax rate taxpayers. -This reduction in taxable market value will cause the net tax capacities to reduce in all taxing districts. • Net tax capacity reductions will cause tax rates to increase. • Reductions in levy will help to mitigate the overall taxation increase, however, the tax shift impacts are unavoidable. • One positive of the law change: Local governments levy will represent the true resources needed to operate the organization. C�CI�CY03TY �� V' r ; ggAER1i, 54ov,' a, 2 ''1