07.04 FISCAL DISPARITY

Transcription

1 07.04 FISCAL DISPARITY The fiscal disparity program, originally known as metropolitan revenue sharing, was introduced by the legislature in the seven-county metro area (Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington counties) in the early 1970 s, as a way of sharing the taxes on a portion of commercialindustrial value growth throughout the region. The legislature recognized that commercial-industrial growth tends to congregate around public infrastructure such as highways and airports that are paid for by taxpayers in the region and decided that all cities should share that growth, not just those cities that directly benefited from the placement of the infrastructure. The program also had the effect of equalizing tax rates throughout the region that, in turn, helped facilitate a regional approach to development as opposed to the cutthroat and parochial actions sometimes taken in other areas of the country. In the mid 1990 s, a separate program was established for a group of counties in the Iron Range. The Iron Range program applies to property in the taconite tax relief area shown below: Early staffers came up with a series of tables to perform these steps. The tables are identified by roman numerals. The tables help in performing tasks but the order can be confusing because they are not processed in numerical order. The tables are processed in the following order: 1. Supplemental Table Va and Vb Determine each city/township s adjusted prior year commercial-industrial value. Starting numbers come from the prior year Table II. 2. Table I Original base values to be adjusted for annexations (rarely used). 3. Table V Determine the initial and final contribution values using results from Supplemental V s and Table I. 4. Table VI Determine fiscal capacity for each city/township (average market values per capita). 5. Table VII Determine initial distribution values. 6. Table VIII Determine distribution tax levies. Allocations to overlapping taxing authorities use prior year Table III. 7. Table II For TNT, determine current year commercial-industrial values by UTA. 8. Table III For TNT, determine current year residential values by UTA. 9. Table IV For TNT, determine total current year tax capacity by UTA by adding results for Tables II and III to tax capacities of types of property not included on those two tables. 10. Tables IXa and IXb For TNT, allocate final contribution values to overlapping taxing jurisdictions using final contribution values from Table V and percentages of commercialindustrial value by UTA from the prior year Table II. Determine the value for determining the local rate by taking the results from the current year Table IV, the allocated contribution from Tables IX, the retained captured value of tax increment districts and powerline values. 11. Table X For TNT, determine local tax rates using results from Tables VIII and IX along with certified levies and disparity reduction aid. 12. Table V For TNT, determine the fiscal disparity sharing factor (the portion of each city/township s commercial-industrial tax base that will pay the area-wide rate). Uses the final contribution from Table V and the current year Table II total values. 13. Repeat steps 7 to 12 for the final tax calculation. FISCAL DISPARITY

2 Tables and Timelines A statutory timetable for submission of metropolitan fiscal disparity data and a general description of the fiscal disparity tables follow. Table I Base Values in Table I was used to establish the 1971 base commercial and industrial values for each City or Township that contributes to the fiscal disparity pool. These base values generally remain constant unless annexations occur, or legislation is enacted that require revisions to occur in order for the base values to parallel the laws by which the current values must adhere to. Table I is prepared before July 15 of each year. Table II Commercial/Industrial - Table II is used to compile the total commercial/industrial values for each district (UTA) within each City or Township. The total for each UTA in comparison to the total C/I value for the entire City or Township is expressed as a percentage and used to assist in the allocation of the value to the UTA level in order to complete Table IX. This table is prepared twice, once as a part of the process in preparing the Abstract due on September 1 and secondly in the calculation of the final values for tax purposes in January. Table III Residential Table III is used to compile the total residential values for each district (UTA) within each City or Township. The total for each UTA in comparison to the total residential value for the entire City or Township is expressed as a percentage and is used for the next years Table VIII and the distribution of fiscal disparities to the City or Township. This table is prepared twice, once as a part of the process in preparing the Abstract due on September 1 and secondly in the calculation of the final values for tax purposes in January. Table IV Total Table IV is a recap of Tables II, III and any additional values whose classifications were outside of Tables II and III by UTA within each City or Township. Table IV reflects the total tax capacity of each UTA for the current assessment year and is used to calculate the local tax rate for each jurisdiction. This table is prepared twice, once as a part of the process in preparing the Abstract due on September 1 and secondly in the calculation of the final values for tax purposes in January. Table V Contribution Table V is a table that contains the total C/I net tax capacity from the base year, the total adjusted C/I net tax capacity from the previous year (Supplemental Table V), the increase, and 40% of the increase or the current payable year initial contribution value by City and Township totals. This table is submitted to the Fiscal Disparity Administrative Auditor on or before July 15 of each year. Table V- Supplemental Adjustments to Previous Year(s) Supplemental Table V is used to adjust the previous year s C/I tax capacity values, due either to values being omitted or court ordered decreases and/or abatements. Adjustments to values accrued during the 12 month period ending on May 1 are compiled by each county and entered onto this table. Final adjustment totals are transferred onto Table V in order to determine the final contribution values for each City and Township. This table is submitted to the Fiscal Disparity Administrative Auditor on or before July 15 of each year. FISCAL DISPARITY

3 Table VI Determination of Fiscal - This table gives the computed indicated market value (taxable market values divided by the sales ratio) divided by the population giving the total fiscal capacity of each city and township in the fiscal disparity area as well as an average fiscal capacity for the entire area. Fiscal capacity is defined as the equalized market value per capita. Equalized market value is the market value adjusted for differential assessment levels between jurisdictions. This table is prepared by the Department of Revenue who returns it to the Administrative Auditor on or before August 10. Table VII Determination of Distribution Indices Table VII is the calculation of distribution values for each city and township in the seven county metro and iron range areas that are subject to fiscal disparities. This table uses the population and fiscal capacity as determined in Table VI as well as the area-wide values and computes the adjusted area tax base distribution for each city and town. If a municipality s fiscal capacity is the same as the average capacity, its share will be equal to its population as a percentage of the entire area s population. If its fiscal capacity is above average, its share will be smaller; if its fiscal capacity is below average, its share will be larger. The Administrative Auditor prepares this table and submits it to the counties in the fiscal disparity area by August 16. Table VIII Distribution Levies Table VIII is the calculation of the distribution levy for each governmental unit, or portion thereof, contained within each county. The distribution levy is the product of the distribution value and the prior year s local tax capacity rate. The total of all the taxing districts distribution dollars for each area (metro or iron range) that is subject to fiscal disparities divided by the total areas contribution value equals the Area-Wide Rate. The counties prepare and submit this table to the Administrative Auditor by August 25. Certification of Area-Wide Rate - By September 1, the Administrative Auditor must calculate and certify the area-wide tax rate to the counties in the area. Table IX Determination of Taxable Value Table IX is the calculation of the local tax capacity value. This tax value is used in determining the Initial Tax Rate. The local tax capacity is the total tax capacity for the current taxable year, less the captured tax increment value, less the fiscal disparity contribution value, less tax capacity used to generate power line credits, when applicable. This table is prepared each time a County is calculating tax rates, (for both the proposed and final tax statements). Table X Calculation of Local Tax Rate Table X is the calculation of the local tax capacity rate for each governmental unit, based upon the tax capacity values and tax levies of the governmental units. Table X includes columns of data, broken down to the fund level, in this order: each governmental units certified levy; the fiscal disparities area wide distribution levy from Table VIII; the local levy (which is the certified levy less the area wide distribution levy); the local tax capacity of the governmental unit; the initial tax rate; the disparity reduction rate; and the local tax rate. The local tax rate is used to determine the tax liability on a parcel basis, before any credits. This table is prepared each time a County is calculating tax rates, (for both the proposed and final tax statements). The tables were designed at a time when many of these tasks were manually filled out and calculated. For most counties, these Tables are now automated. Tables V and supplemental V, VII and VIII are shared between counties and so are distinct reports produced each year. The other tables, in certain systems, have been rolled into automated valuation summaries, tax base determinations and tax rate calculations. For these counties, some of these tables no longer exist because the functionality associated with the tables has been rolled into other parts of the system. FISCAL DISPARITY

4 An administrative auditor helps coordinate fiscal disparity activities between the counties. The current administrative auditor for the metro area is Anoka County and for the Iron Range is St. Louis County. Table V and Supplemental V (Contribution Values) Description The Supplemental Table V s are used to determine the adjusted commercial-industrial values for the prior year. Table Va covers adjustments for the current and two prior tax years. Table Vb was added to allow adjustments for earlier tax years. Values are accumulated by city/township with a total for the county. If class rates have changed for commercial-industrial property for any of these tax years, the adjustments need to be equalized to the commercial-industrial values for the prior year. This is accomplished by determining how the current class rate compares to the class rate for the tax year in question and applying the resulting percentage to the net tax capacity of the adjustment. For example, if the prior year class rate for commercial property is 1.5% and the class rate for the tax year with an adjustment is 2.5%, then an adjustment factor of 1.5%/2.5% or 60% would be applied to the adjustment net tax capacity to equalize it. Pre 1979 tax increment districts do not have to contribute to the fiscal disparity pool so the retained captured value for commercial-industrial for these districts is subtracted from the values on Supplemental Va. Table V is used to calculate the initial contribution value for each city/township. Base values from Table I, as adjusted for annexations, are equalized using the same methodology described for adjustments. This equalization is intended to bring the base value in sync with the prior year adjusted commercial-industrial values. The initial contribution value is equal to 40% of the difference between the equalized base value and the adjusted prior year commercial-industrial value. The final contribution value is determined by equalizing the initial contribution value to current year class rates. This result is then certified to the administrative auditor. The sum of Table V s for all the counties gives you the total fiscal disparity pooled value for the current year. When TNT taxes are calculated and again when final taxes are calculated, Table V is used to determine what portion of a city/township s commercial-industrial net tax capacities will pay the fiscal disparity area-wide rate. This is determined by dividing the final contribution value for a city/township by the current year commercial-industrial net tax capacity from Table II. This percentage can then be applied to the commercial-industrial value of each parcel in that city/township to determine what portion of the parcel s value will pay the fiscal disparity tax. Use(s) Certification of adjusted contribution value for use in determining the full value of the fiscal disparity pool for that year. Determination of final contribution value to be used to reduce the net tax capacity of a taxing authority in order to calculate local tax rates. FISCAL DISPARITY

5 Determination of fiscal disparity sharing factor used to determine what portion of a parcel s value will be used to extend fiscal disparity taxes. Who Prepares the Document County Auditor Who Gets the Document Administrative Auditor. County Auditor. Statutory Cite M.S. 473F.06 (Metro) & M.S. 276A.04 (Iron Range) Timing The statutory due date for supplying the administrative auditor with final contribution values is on or before 7/15. The Supplemental Table V s include prior and current year adjustments made from 5/01 in the prior year to 4/30 in the current year. The fiscal disparity sharing factor portion of Table V is completed for TNT and again for final tax extensions. Source of Data Starting values for the Supplemental V are taken from the prior year Table II. Pre-1979 captured tax increment values are pulled from the TIF parcel list or equivalent. Adjustments are pulled from adjustment summaries and/or source documents. Base values adjusted for annexations are taken from Table I. Initial and final contribution values are determined from these elements. The final contribution value and the current year values from Table II are used to calculate the fiscal disparity sharing factors. Sample COMPLETED BY COUNTY AUDITOR SUBMITTED TO ADMINISTRATIVE AUDITOR District 1971 Total Adjusted C/I (From previous year's Table V, Col. B) (A) CONTRIBUTION TAX CAPACITY DATA BY ASSESSMENT DISTRICT FOR TAXES PAYABLE IN 2007 INFORMATION SUBMITTED TO ADMINISTRATIVE AUDITOR 1971 Adjusted Total C/I 100.0% X (A) = B (B) 2005 Total C/I As Adjusted (Supp. Table V, Col. M) (C) 2005 Adjusted Increase Over 1971 (C) - (B) = (D) (If Negative, Put Zero) (D) Initial Payable 2007 Contribution (40% X (D) = (E) (E) Final Payable 2007 Contribution 100% X (E) = (F) (F) TABLE V COUNTY OF COUNTY AUDITOR INFORMATION 2006 Total C/I (From Table II, Col K) (G) Final Contribution as a Percent of 2006 Total C/I Value (F) :- (G) = (H) (H) FISCAL DISPARITY

6 06/02/ :30:31 PAGE 1 Completed By County Auditor Contribution TABLE V Submitted To Administrative Auditor By District County of: Spruce For Taxes Payable in 2007 Information Submitted to Administrative Auditor County Auditor Information 2005 TOT C 2005 ADJUST 2006 TOTAL TAX CAPACITY '71 ADJUSTED TAX CAPACITY INC OVER '71 INITIAL PAYABLE 2007 C/I CONTRIBUTION 1971 TOTAL TOTAL C/I AS ADJUSTED (C)-(B)=(D) PAYABLE 2007 FINAL TAX CAPACITY PERCENT 2006 C/I TAX CAPACITY (SUPP. TABLE IF NEGATIVE, CONTRIBUTION CONTRIBUTION (FROM TABLE TOT C/I VALUE TAX CAPACITY %*(A) V, COL F) PUT ZERO) 40%*(D) %*(E) II, COL K) (F)/(G) ASSESSMENT DISTRICT (A) (B) (C) (D) (E) (F) (G) (H) City/Township TOTAL Spruceville 40,931 40,931 2,621,918 2,580,987 1,032,395 1,032,395 2,876, Oak 321, ,168 4,900,801 4,579,633 1,831,853 1,831,853 5,381, Aspen 148, ,264 1,465,849 1,317, , ,034 1,736, Elm 2,234,139 2,234,139 21,033,471 18,799,332 7,519,733 7,519,733 23,473, COUNTY TOTAL 2,744,502 2,744,502 30,022,039 27,277,537 10,911,015 10,911,015 33,466,762 ADJUSTMENTS TO 2005 COMMERCIAL/INDUSTRIAL SUPPLEMENTAL TABLE Va* COMPLETED BY COUNTY AUDITOR TAX CAPACITY SUBMITTED TO ADMINISTRATIVE AUDITOR FOR TAXES PAYABLE IN 2007 COUNTY OF OMITTED C-I VALUE FOR ASSESSMENT YEARS 2002, 2003 & 2004 COURT DECREASED AND/OR ABATED VALUE District 2005 Total C-I from Prev. Year Tbl II, col. K A Pre-1979 Tax Increment Exemption B 2003 Tax (Pay 2004) for Payable 2005 C 2003 (Pay 2004) Adj T/C (100%) x(c) D 2004 Tax (Pay 2005) for Payable 2006 E 2004 (Pay 2005) Adj T/C (100.0%) x (E) F 2005 Tax (Pay 2006) for Payable 2007 G 2003 Assess. (Pay 2004) for Payable 2005 Contribution H 2003 Assess. (Pay 2004) for Payable 2005 Contribution (100%)x(H) I 2004 Assess. (Pay 2005) for Payable 2006 Contribution J 2004 Assess. (Pay 2005 for Payable 2006 Contribution (100.0%)x(J) K 2005 (Pay 2006) for Payable 2007 Contribution L 2005 Total C-I as Adjusted A-B+D+F+ G-I-K-L+ Supp Vb Col M M ADJUSTMENTS TO 2005 COMMERCIAL/INDUSTRIAL SUPPLEMENTAL TABLE Vb* COMPLETED BY COUNTY AUDITOR TAX CAPACITY SUBMITTED TO ADMINISTRATIVE AUDITOR FOR TAXES PAYABLE IN 2007 COUNTY OF District Add/(Abate) Payable Year A Adjustment to Tax Percentage % B Add/(Abate) Payable Year C Adjustment to Tax Percentage % D Add/(Abate) Payable Year E Adjustment to Tax Percentage % F Add/(Abate) Payable Year G Adjustment to Tax Percentage % H Add/(Abate) Payable Year I Adjustment to Tax Percentage % J Add/(Abate) Payable Year K Adjustment to Tax Percentage % L Total C-I as Adjusted B+D+F+H +J+L M Table VIII (Distribution Dollars) Description Table VIII is used to allocate fiscal disparity distribution values to each taxing authority and then to determine the fiscal disparity distribution levy to be generated from the fiscal disparity pool. To determine the distribution value for each taxing authority, the distribution values for each city/township from Table VII are multiplied by the percentage of residential property located in each UTA as shown on the prior year Table III. The resulting distribution values are multiplied by the prior year local tax rate for that authority to arrive at the distribution levy. Since distribution values are available by taxing authority by UTA, authorities that have different local tax rates are not a problem since the local tax rate for that UTA can be applied to the appropriate distribution value for that UTA. Market value based rates for schools are also used for calculating distribution levies. The previous year s market value rate is converted to a tax capacity based equivalent and this resulting rate is applied FISCAL DISPARITY

7 to the distribution value of the school to arrive at the distribution levy that will be applied to current year market based taxes for the school. In a couple circumstances, the legislature has added levies to the fiscal disparity distribution levy that were not the result of the prior year tax rate process described above. The two levies that fit this category are a $5,000,000 Livable Community levy for the Metropolitan Council and a levy for Bloomington highway bonds for work associated with the Mega-mall. The Bloomington highway bonds process includes a provision for payback of previous dollars received for this purpose starting with payable 2009 taxes. Since this calculation is done in August, one complicating factor can occur when a taxing authority levies in a prior levy but not in the current year. A fiscal disparity distribution levy is generated but there is no levy to apply it to. If this is simply a matter of a taxing authority not levying for a particular fund, the distribution levy can be applied to other levies of the authority. However, if the taxing authority is not levying at all, the distribution levy should be distributed in the settlement to county revenue and an adjustment should be made for the fiscal disparity distribution determination for the county in the following year to reflect the fact that excess funds were received in the prior year. Use(s) Certifies fiscal disparity distribution levies for each taxing authority in the county for use in calculating the area-wide tax rate. Provides the fiscal disparity distribution levies that will be used to reduce certified tax levies for the purpose of calculating local tax rates and market-based rates for schools. Provides the initial distribution levy amount used for distributing fiscal disparity tax collections in the tax settlement process. Provides the distribution values needed for the assessment abstract. Who Prepares the Document County Auditor Who Gets the Document Administrative Auditor Statutory Cite M.S. 473F.08 (Metro) & M.S. 276A.08 (Iron Range) Timing Statutory due date is on or before 8/25. Table VII needed to prepare this table is due on or before 8/15. Source of Data Distribution values by city/township are pulled from Table VII. The percentage of residential property in each UTA is pulled from the prior year Table III. The prior local tax rates are pulled from the prior year rate summary or equivalent. The school district equivalent local tax rates (converted market value based rate) are certified by the administrative auditor each year. FISCAL DISPARITY

8 Sample COMPLETED BY COUNTY AUDITOR SUBMITTED BY ADMINISTRATIVE AUDITOR TABLE VIII COUNTY OF COMPUTATION OF AREA WIDE DISTRIBUTION LEVY FOR TAXES PAYABLE IN 2007 Governmental Unit By District Distribution To District (From Table VII, Col. G) (A) % of 2005 Res. in Govt. Unit (From 2005 Table III, Col. G) (B) Distribution Value to Governmental Unit (A)X(B)=(C) (C) Payable 2006 Total Local or Equivalent Local Tax Rate (D) Payable 2007 Area-Wide Distribution Levy for Govt. Unit (C)X(D)=(E) (E) 06/02/ :05:15 Commercial/Industrial PAGE 1 Completed By County Auditor Computation of Area Wide Distribution Levy TABLE VIII Submitted To Administrative Auditor For Taxes Payable in 2007 County of: Spruce PAYABLE 2007 % OF 2005 PAYABLE AREA WIDE DISTRIBUTION RES TAX CAP DISTRIBUTION 2006 DISTRIBUTION GOVERNMENTAL TO ASSESSMNT IN GOV UNIT VALUE TO TOTAL LOCAL LEVY FOR UNIT BY DIST (FROM) FROM 2004 GOVT UNIT TAX CPC GOVT UNIT ASSESSMENT TABLE VII-G TABLE III-G (A)*(B)=(C) RATE (C)*(D)=(E) DISTRICT T/C Sch Sp1 Sp2 Sp3 Sp4 Sp5 Sp6 Sp7 Sp8 Sp9 (A) (B) (C) (D) (E) **** 01 CITY ******** 0014 Spruceville 9717 Spruceville , , Spruceville , , , Spruceville , Spruceville , , ,104 Spruceville , ,102 Table II, III, IV (Tax capacities by type of property) Description Table II shows commercial/industrial tax capacities and the percentage of those tax capacities within each UTA within each city/township. Table III shows the same type of information but for residential property. Table IV includes the total tax capacities from Table II and III and adds the tax capacities for classes of property not included on those two tables to arrive at a total tax capacity (before fiscal disparity, tax increment and powerline adjustments) for each UTA within each city. Use(s) The total tax capacity for each city/township on the prior year Table II is used as the starting point for the supplemental Table Va. The total tax capacity for each city/township on the current year Table II is used for calculating the fiscal disparity sharing factor on Table V for both TNT and final tax calculations. The percentage of commercial/industrial property within each UTA from the prior year Table II is used for allocating the contribution value to overlapping taxing authorities in Table Ixb. FISCAL DISPARITY

9 The percentage of residential property within each UTA from the prior year Table III is used for allocating the distribution value to overlapping taxing authorities on Table VIII. The total tax capacities on Table IV can be used as the starting values on Table X or a Table X equivalent for the purpose of calculating local tax rates for TNT and final. Who Prepares the Document County Assessor although in many counties the County Auditor may generate these reports. Who Gets the Document County Auditor Statutory Cite None Timing Generated at TNT and again for final tax calculations. Source of Data Tax capacities can be pulled from the assessment abstract or another similar valuation summary. Sample See next page Table II - form COMMERCIAL/INDUSTRIAL TAX CAPACITY TABLE II 2006 CAPACITY COUNTY OF COMPLETED BY COUNTY ASSESSOR SUBMITTED TO COUNTY AUDITOR FOR TAXES PAYABLE IN 2007 CLASS 5 CLASS 3 & 5 PROPERTY REAL PROPERTY PERSONAL PROPERTY* District by Minor Governmental Unit (A) Public Utility Fixtures to Real Property (Attached Machinery) (B) Public Utility Fixtures To Personal Property Item 31 (C) Class 3H, Refinery Real Prop. or Parking Ramps (D) All Other Real Prop. Either Used or Zoned for C/I Purposes 3A, 3B, 5(3) (E) Non-Residential Structures on Leased Public Lands and on Railroad Right of Ways Items 41 & 42 (F) All Other Real Estate Leased Under M.S. Sec Item 43 (G) Systems of Electric Utilities Item 44 (H) Systems of Gas Utilities Item 45 (I) Systems of Water Utilities Item 46 (J) Other Taxable Personal Prop. Not Included Elsewhere Item 48 (K) TOTAL A thru J Column A3 (L) Percent of Governmental Unit to Total District (6 Decimal Places) (sample continues on the next page) FISCAL DISPARITY

10 Table II alternate form with numbers 6/2/ :31 Commercial/Industrial PAGE 1 Completed By COUNTY ASSESSOR TABLE II Submitted To COUNTY AUDITOR 2006 County Of: Spruce For Taxes Payable in 2007 % OF GOV'TL UNIT TO ASSESSMENT TOTAL DISTRICT BY TOTAL ASSESSMENT MINOR GOV'TL COLUMN A3 DISTRICT UNIT T/C Sch Sp1 Sp2 Sp3 Sp4 Sp5 Sp6 Sp7 Sp8 Sp9 (K) (L) **** 01 CITY ******** 0014 Spruceville 9717 Spruceville , Spruceville ,492, Spruceville Spruceville , Spruceville 2,876, Table III - form 2006 RESIDENTIAL TAX CAPACITY COMPLETED BY COUNTY ASSESSOR FOR TAXES PAYABLE 2007 SUBMITTED TO COUNTY AUDITOR District By Minor Governmental Unit A Class 2A Ag Homestead * ** B Class 1A, 1B, 1C Non- Ag Homestead * ** C Class 4A Non- Homestead 4 or more units D Class 4B Non- Homestead Res. Prop. 3 or less units E Government Housing 4B, 4C, 4D, 4E F Total Columns A - E TABLE III COUNTY OF G Percent of Gov. Unit to Total Dist. (6 decimals) Table III alternative form with numbers 6/2/ :31 PAGE 1 Completed By County Assessor Submitted To County Assessor 2006 Residential For Taxes Payable in 2007 TABLE III County Of: Spruce % OF GOV'TL TOTAL UNIT TO ASSESSMENT COLUMNS TOTAL DISTRICT BY A - E ASSESSMENT MINOR GOV'TL COLUMN A3 DISTRICT UNIT T/C Sch Sp1 Sp2 Sp3 Sp4 Sp5 Sp6 Sp7 Sp8 Sp9 (F) (G) **** 01 CITY ******** 0014 Spruceville 9717 Spruceville , Spruceville ,120, Spruceville Spruceville ,406, Spruceville 11,543, (sample continues on the next page) FISCAL DISPARITY

11 Table IV form TABLE IV COMPLETED BY COUNTY ASSESSOR 2006 TOTAL TAX CAPACITY* SUBMITTED TO COUNTY AUDITOR FOR TAXES PAYABLE IN 2007 COUNTY OF District By Minor Governmental Unit Commercial/ Industrial (Table II Col. K) Residential (Table III Col. F) 2B Agricultural Non-Homestead 2006 TAX CAPACITY 4C Seasonal Recreational Property (C) ALL OTHER Class 5 Unimproved Land Not Used or Zoned Commercial/ Industrial All Other Property Not Included in Columns A, B, C 1, C 2 or C 3 ** Class 2B, 5 Total All Other (C 1 + C 2 + C 3 + C 4 ) Total Columns A + B + C 5 (A) (B) (C 1 ) (C 2 ) (C 3 ) (C 4 ) (C 5 ) (D) * The valuation of Class 2A - Mobile homes is not to be included in this total. Mobile home valuation is not to be considered a part of the assessment district's total valuation base. ** Specifically this is Class 2B timber land; Class 3 structures on leased public lands in rural areas (1974, Item 32); and Class 3 agricultural real estate leased under M.S. Section (1974, Item 33). Table IV alternative form with numbers 6/2/ :31 PAGE 1 Completed By County Assessor 2006 Total TABLE IV Submitted To County Auditor For Taxes Payable in 2007 County Of: Spruce ASSESSMENT COMMERCIAL TOTAL DISTRICT INDUSTRIAL RESIDENTIAL ALL OTHER TOTAL BY MINOR (TABLE II (TABLE III (C1 + C2 + (COLUMNS GOVERNMENTAL COL. K) COL. F) C3 + C4) A + B + C5) UNIT T/C Sch Sp1 Sp2 Sp3 Sp4 Sp5 Sp6 Sp7 Sp8 Sp9 (A) (B) (C5) (D) **** 01 CITY ******** 0014 Spruceville 9717 Spruceville ,776 16, , Spruceville ,492,679 4,120,507 59,070 6,672, Spruceville Spruceville ,020 7,406,421 20,235 7,804,676 Spruceville 2,876,205 11,543,843 79,305 14,499,353 Table I (Original base values) Description For metro counties, Table I was originally prepared showing the 1971 (payable 1972) assessed value of commercial and industrial property in each city and township in the seven county metropolitan area. The Iron Range program uses 1995 as the base year. The base values on Table I remain constant unless there is an annexation or other similar change to a city or township boundary. If such a change occurs, the county assessor must determine the adjusted base value to be removed from the original community and added to the new community. FISCAL DISPARITY

12 Use(s) Reporting original fiscal disparity base values for use in determining fiscal disparity contribution values on Table V. Reporting adjustments in base value due to annexation or other similar adjustments to a city or township boundary. Who Prepares the Document County Assessor Who Gets the Document County Auditor Statutory Cite None Timing Any adjustments must be identified before Table V s can be completed so ideally any adjustments would be handled in early July but in no case later than 7/15. Source of Data If an annexation involves commercial or industrial property, original parcel lists should be reviewed to determine how much base value should be shifted from one community to another. If no annexations or similar boundary changes occur, the values on the report do not change from year to year. Sample COMMERCIAL/INDUSTRIAL TAX CAPACITY TABLE I COMPLETED BY COUNTY ASSESSOR SUBMITTED TO COUNTY AUDITOR CLASS COUNTY OF: Spruce CLASS 3 & 5 PROPERTY REAL PROPERTY PERSONAL PROPERTY* District by Minor Governmental Unit (A) Public Utility Fixtures to Real Property (Attached Machinery) (B) Public Utility Fixtures To Personal Property Item 31 (C) Class 3H, Refinery Real Prop. or Parking Ramps (D) All Other Real Prop. Either Used or Zoned for C/I Purposes 3A, 3B, 5(3) (E) Non-Residential Structures on Leased Public Lands and on Railroad Right of Ways Items 41 & 42 (F) All Other Real Estate Leased Under M.S. Sec Item 43 (G) Systems of Electric Utilities Item 44 (H) Systems of Gas Utilities Item 45 (I) Systems of Water Utilities Item 46 (J) Other Taxable Personal Prop. Not Included Elsewhere Item 48 (K) TOTAL A thru J Column A3 Spruceville 1971 actual $ 670,251 $ 2,664,942 $ 279, adjusted 1,915,003 8,185, ,709 10,851,891 Table IX (Allocation of Contribution Values) Description Table IX is used to determine the tax capacities that will be used for determining local tax rates. Table IXb is used for overlapping taxing authorities and includes an allocation process for final contribution values based on the prior year s percentage of commercial/industrial property within each UTA. Table IXa is used for taxing authorities that do not require an allocation of the final contribution values. FISCAL DISPARITY

13 Use(s) Allocates final contribution values for overlapping taxing authorities. Provides the adjusted tax capacity values needed for calculating local tax rates. Provides final contribution values by UTA for the assessment abstract. Who Prepares the Document County Auditor Who Gets the Document County Auditor Statutory Cite None Timing Is needed for TNT (October) and again for final tax rate calculation (February/March). Tax capacities and tax increment calculations need to be complete before this table can be completed. This table is typically one of the last steps performed before local tax rates are calculated. Source of Data Total tax capacities come from Table IV or the assessment abstract or similar valuation report. Tax increment captured values come from the TIF parcel list and TIF captured value calculation or equivalents. The current year final contribution value for each city/township is pulled from Table V. Percentages of commercial/industrial tax capacity by UTA are pulled from the current year Table II. Sample (see below and next page) COMPLETED BY COUNTY AUDITOR TABLE IXa COUNTY OF DETERMINATION OF TAXABLE VALUE OF GOVERNMENTAL UNIT INCLUDING ALL OF ONE ASSESSMENT DISTRICT ONLY FOR TAXES PAYABLE IN 2007 Governmental Unit Governmental Unit 2006 (from 2006 Table IV, Col. D) (A) Payable 2007 Tax Increment Financing Captured Value (T.I.F.) (B) Payable 2007 Final Contribution to Area Wide Tax Base from Government Unit (from Table V, Col. F) (C) Payable 2007 Powerline Value (D) 2007 Local (A)-(B)-(C)-(D)=(E) (E) FISCAL DISPARITY

14 TABLE IXb COMPLETED BY COUNTY AUDITOR GOVERNMENTAL UNIT OF COUNTY OF DETERMINATION OF TAX CAPACITY OF GOVERNMENTAL UNIT LYING IN MORE THAN ONE ASSESSMENT DISTRICT FOR TAXES PAYABLE IN 2007 District Governmental Unit 2006 (From Table IV, Col. D) (A) Payable 2007 Tax Increment Financing Captured Value(TIF) (B) Payable 2007 Powerline Value (C) Payable 2007 Final Contribution From District (From Table V, Col. F) (D) Percent of 2006 C/I in Gov'tl Unit (From 2006 Table II, Col. L) (E) Payable 2007 Final Contribution From Governmental Unit (D)X(E)=(F) (F) Governmental Unit 2007 Value (A)-(B) -(C)-(F)=(G) (G) Table X (Local tax rate calc) Description Table X provides the components for calculating local tax rates and is used for calculating those rates. Most counties use a tax rate calculation program (sometimes called a Table X equivalent) to perform this task. Use(s) Used to calculate local tax rates. Can be used as an independent test of tax rate calculation programs. Who Prepares the Document County Auditor Who Gets the Document County Auditor Statutory Cite None Timing This report (or equivalent) is generated for TNT (October) and again for final tax calculation (February/March). This is typically one of the last steps before tax calculation and extension. FISCAL DISPARITY

15 Source of Data Certified local tax levies can be pulled from taxing district levy certifications. Fiscal disparity distribution levies are pulled from Table VIII. The fiscal disparity distribution levy for a particular taxing authority is allocated based on proportionate shares of the authority s tax capacity based levy. The tax capacity used to calculate the local tax rate is taken from Table IX or equivalent. The disparity reduction rate can be pulled from the disparity reduction rate calculation or equivalent. Sample COMPLETED BY COUNTY AUDITOR Budget Item Pay 2007 Certified Levy* (A) Area Wide Levy Percent Distribution (B) DETERMINATION OF LOCAL AND AREA WIDE LEVY BY MAJOR PURPOSE OF LEVY Area Wide Levy (For Governmental Unit From Table VIII, Col. E (C) FOR TAXES PAYABLE IN 2007 Pay 2007 Local Levy (A)-(C)=(D) (D) 2006 Local Tax (From Table IXA, Col.D or Table IXB, Col. E) (E) Initial 2007 Tax Rate (D):-(E)=(F) (F) TABLE X GOVERNMENTAL UNIT Disparity Reduction Rate (G) COUNTY OF Local Tax Rate (F)-(G)=(H) (H) Table VII (Certification of distribution value) Description Table VII is used to calculate fiscal disparity distribution values by city/township. Fiscal capacities (average market values per capita) are pulled from Table VI and then indexed across the counties in the pool. Fiscal capacity is used as a measure of need based on how much tax base is available for taxing purposes. City/townships receive less distribution value if their fiscal capacity is higher than the average for the region. Conversely, a city/township will receive more distribution value if their fiscal capacity is less than the average for the region. Use(s) Along with prior year local tax rates, is used to calculate fiscal disparity distribution levies on Table VIII. Who Prepares the Document Administrative Auditor Who Gets the Document County Auditors Statutory Cite M.S. 276A.05 (Iron Range) M.S. 473F.07, subd. 5 (Metro) FISCAL DISPARITY

16 Timing Statutory due date is on or before 8/15. However, Table VI which is needed to produce this report has a statutory due date of 8/10. Source of Data Populations by city/township are provided by the state demographer. Fiscal capacities are determined by the MN Dept. of Revenue and supplied on Table VI. The total pool value for allocation is supplied by accumulating final fiscal disparity contribution values from Table V s for the region. Sample COMPLETED BY ADMINISTRATIVE AUDITOR SUBMITTED TO COUNTY AUDITOR District 2005 Population (Metro Council) Fiscal (Table VI Col. C) DETERMINATION OF DISTRIBUTION INDICES FOR TAXES PAYABLE IN 2007 Average Fiscal :- Fiscal Final Distribution Index (A) x (C) Final Dist. Index :- Total of Area Final Dist. Indices (10 Decimal Places) TABLE VII COUNTY OF Area Tax Base Distribution* (Whole Dollar) Adjusted Area Tax Base Distribution* (F x Adj. Ratio) (A) (B) (C) (D) (E) (F) (G) TABLE VI COMPLETED BY COMMISSIONER OF REVENUE SUBMITTED TO ADMINISTRATIVE AUDITOR COUNTY OF DETERMINATION OF FISCAL CAPACITY FOR TAXES PAYABLE IN 2007 ASSESSMENT DISTRICT 2005 POPULATION (Metro Council) (A) 2005 REAL PROPERTY MARKET VALUE (DEPT. OF REVENUE) (B) FISCAL CAPACITY (B) :- (A) = (C) (C) Area-wide Tax Rate Description This is the certification of the fiscal disparity area-wide tax rate that will be applied to a portion of the value for all commercial/industrial properties in the region to arrive at the fiscal disparity tax on those properties. FISCAL DISPARITY

17 Use(s) Calculation of fiscal disparity taxes. Who Prepares the Document Administrative Auditor Who Gets the Document County Auditor Statutory Cite M.S. 276A.06, subd. 5 M.S. 473F.08, subd. 5 Timing On or before 9/01. Table VIII is needed to perform this calculation. Table VIII has a statutory due date of 8/25. This area-wide rate is used for both TNT and final tax calculations. Source of Data Final contribution values are pulled from Table V s for all the counties in the region. Distribution levies are pulled from Table VIII s for all the counties in the region. Area-wide rate is total levies divided by total pooled value. Sample Dear Spruce County Auditor: I, Jane Doe, Property Tax Administrator, Anoka County, Minnesota and Administrative Auditor for Minnesota Statutes Chapter 473F, do hereby certify that the area-wide tax capacity rate for taxes payable in 2006 for the metropolitan area is %. The attached table indicates the area-wide tax base and levy by county for the seven county metropolitan area and the area-wide tax capacity rate. Thank you for your assistance during this year s fiscal disparities process. If you have any questions, please feel free to call me at (555) Sincerely, Administrative Auditor FISCAL DISPARITY

18 Certification of Area-wide Tax Levies Description This certification shows the amount of fiscal disparity contribution taxes that should be generated in each county in the region. The certification also shows the fiscal disparity distribution dollars that are due to each county. If the amount contributed exceeds the amount distributed, the county is a net contributor and must make payment of the difference to the administrative auditor. The certification tells these counties how much they need to pay and by when. If the amount contributed is less than the amount distributed, the county is a net gainer and will receive checks in the first and second half settlements from the administrative auditor to make up the difference. The certification tells the county how much they will receive and when. Use(s) Tells each county in the region how much they will receive from or how much they need to pay into the fiscal disparity pool. Provides a summary of contribution values and taxes, and distribution values and taxes for each county in the region for that tax payable year. Who Prepares the Document Administrative Auditor Who Gets the Document County Auditor Statutory Cite M.S. 276A.06, subd. 8 M.S. 473F.08, subd. 7a Timing On or before 5/16. If net contributor, county treasurer makes payment of one-half of the excess on or before 6/15 and 11/15. Source of Data Contribution values are accumulated from Table V s for counties in the region. Distribution values are accumulated from Table VII s. Distribution levies are accumulated from Table VIII s. Contribution taxes are determined by multiplying the contribution value by the area-wide tax rate. Sample (see next page) FISCAL DISPARITY

19 Dear Spruce County Auditor: In accordance with M.S. 473F.08, Subd. 7a, a copy of the certification of the area-wide tax levies is enclosed. One-half of the excess of your total levy on distribution value over the total tax on contribution value is $ 13,011, This is to be paid to you on June 15, This payment will be handled through the Administrative Auditor s office. Sincerely, Administrative Auditor FISCAL DISPARITIES SUMMARY BY COUNTY PREPARED BY: ADMINISTRATIVE AUDITOR TAXES PAYABLE 2003 AREA-WIDE TAX BASE VALUES AREA-WIDE TAX BASE LEVY (DOLLARS) FINAL CONTRIB. DISTRIBUTION CONTRIBUTION DISTRIBUTION DIFFERENCE (Fm Tbl V COL E) (Frm Tbl VII) DIFFERENCE(C 2 X AW RATE) (Frm Tbl VIII) NET COUNTY C 2 C 3 (C 3 - C 2) C 5 C 6 (C 6 - C 5) ADJ. DIFFERENCE Anoka 17,378,712 29,990,388 12,611,676 23,093, ,219, ,126, ,126, * 17,378,712 12,611,676 Carver 3,736,957 5,698,361 1,961,404 4,965, ,395, ,429, ,429, * 3,736,957 1,961,404 Dakota 28,551,466 30,894,651 2,343,185 37,940, ,233, ,707, ,707, * 28,551,466 2,343,185 Hennepin 129,397,771 89,396,052-40,001, ,950, ,400, ,549, ,549, * 129,397,771-40,001,719 Ramsey 34,244,652 52,386,574 18,141,922 45,506, ,527, ,021, ,022, * 34,244,652 18,141,922 Scott 5,985,694 6,793, ,541 7,954, ,017, , , * 5,985, ,541 Washington 12,420,848 16,556,839 4,135,991 16,505, ,121, ,615, ,615, * 12,420,848 4,135,991 TOT. METRO 231,716, ,716, ,915, ,915, * INITIAL 231,716,100 CONTRIBUTION FROM COL E TBL V Payable 2003 Area-Wide Rate: % Payable 2002 Area-Wide Rate: % Adjustments have been apportioned and distributed in the same manner as in previous years. This is due to rounding. Shaded lines are "FINAL" values. *Denotes Initial Contribution from Table V - Col E (sample continued on next page) FISCAL DISPARITY

20 PAYABLE 2003 AREA-WIDE LEVY AMOUNT COUNTY FIRST HALF SECOND HALF TOTAL Anoka $ 6,063, $ 6,063, $ 12,126, Carver $ 1,214, $ 1,214, $ 2,429, Dakota $ (853,734.85) $ (853,734.84) $ (1,707,469.69) Hennepin $ (21,274,517.97) $ (21,274,517.96) $ (42,549,035.93) Ramsey $ 13,011, $ 13,011, $ 26,022, Scott $ 31, $ 31, $ 63, Washington $ 1,807, $ 1,807, $ 3,615, $ 0.01 $ (0.01) $ (0.00) FISCAL DISPARITY