By Starrla Cray
It’s almost time for local government sectors to finalize their 2010 levy amounts, which will determine how much property owners will pay in taxes.
Each September, cities, counties, and school districts set preliminary levy amounts, which are finalized in December. The preliminary amount can be reduced, but it can’t be raised.
“Most cities, Watertown included, submit a ‘top’ number for the preliminary levy in September, with the thought that between Sept. 15 and December, the levy will be trimmed to bring the effective tax rate down,” commented Watertown Finance Director Steven Wallner. “By submitting a ‘top’ number in September, the city is giving itself the most flexibility in finalizing the budget.”
In Howard Lake, for example, the city’s estimated 2010 tax rate is 48.54 percent. The council, however, has given the city direction to trim it back to 46.63 percent, City Administrator Kelly Hinnenkamp noted.
“Levies directly affect the tax rate, and the tax rate is used to calculate how much you pay in taxes,” she added.
Local units each have a unique situation, and just because one has a higher levy amount than another doesn’t necessarily mean an individual taxpayer has higher taxes.
Some sectors have a larger tax base, which means that the taxes are spread over more properties.
The values of the properties can also make a difference in the amount that each taxpayer owes. People with higher-valued properties pay more than people with lower-valued ones.
Tax levies and rates often change from year to year, as well. For the Dassel-Cokato School District, the levy went up by almost 19 percent from 2007 to 2008. The reason for this was because there was no referendum that year, business manager Tina Palmer explained.
The 2010 tax rate for Howard Lake-Waverly-Winsted schools was estimated at about 27 percent, but the Nov. 3 referendum passage will change that tax rate, McLeod County Auditor Cindy Schultz said.
Public meetings will take place before finalization of all the levy amounts. Some local entities have their finalization and hearing the same day, while others have a separate meeting.
To see a breakdown of levies and tax rates for local cities, counties, and school districts, click here.
(This chart has been updated to reflect correct tax rate data.)
Helpful tax terms
Tax levy: This is the total dollars to be raised with property taxes. To get this number, a city, county, or school district will first figure out its budget needs. Then, it will subtract the revenue it is getting from state aid and other sources, such as fines and building permits. The remaining amount is the tax levy that will be paid by property owners.
Market value: Assessors determine the value of properties by estimating the properties’ selling prices. Each spring, property owners receive a “notice of valuation” in the mail for each piece of property they own.
Class rate: Different types of property are taxed at different rates. Cabins and recreational residences are taxed higher than year-round homes, for instance. Apartments, farms, homes, and businesses each have their own “class rate” percentage, which is set by state law.
Tax capacity: The market value of a property multiplied by the class rate is called the “tax capacity.”
Tax rate: The tax rate of a city, county, or school district is found by taking the tax levy and dividing it by the tax capacity. A tax levy of $750,000, for example, with a tax capacity of $2,500,000, would result in a 30 percent tax rate.
Levy meetings are listed as follows:
Levy meetings for local counties:
Wright County: Hearing and finalization Tuesday, Dec. 1 at 6 p.m.
McLeod County: Hearing is set for Thursday, Dec. 10 at 6 p.m.
Carver County: Hearing at budget meeting Tuesday, Dec. 1 at 6 p.m. Finalization Tuesday, Dec. 15 at 9 a.m.
Meeker County: Hearing set for Thursday, Dec. 10 at 6 p.m.
Levy meetings for local schools:
Dassel-Cokato School District: Hearing set for Monday, Dec. 14 at 7 p.m. Will be finalized that night or Tuesday, Dec. 29.
Delano School District: Hearing will be during regular board meeting Monday, Dec. 21, at 7 p.m.
Howard Lake-Waverly-Winsted School District: Hearing will be Monday Dec.14 at 6 p.m., as part of the school board meeting.
Lester Prairie School District: Hearing Monday, Dec. 14 at 6:30 p.m. prior to regular meeting.
Watertown-Mayer School District: Hearing and finalization set for Monday, Dec. 21 at 7 p.m.
Levy meetings for local cities:
Cokato: Hearing and finalization is Monday, Dec. 14 at 7 p.m.
Darwin: Hearing and finalization at regular council meeting Tuesday, Dec. 1 at 7 p.m.
Dassel: Hearing and finalization set for Monday, Dec. 7 at 7 p.m. If no decision is reached, the finalization will be moved to Monday, Dec. 21 at 7 p.m.
Delano: Hearing is Tuesday, Dec. 1 at 6 p.m. Levy will be finalized at Tuesday, Dec. 15 meeting at 7 p.m.
Howard Lake: Hearing and finalization set for Tuesday, Dec. 1 at 7 p.m. during regular council meeting.
Lester Prairie: Tuesday, Dec. 8 public hearing at 7 p.m. with regular meeting to follow with finalization of levy amount.
Loretto: Hearing and finalization will be at the city council meeting Tuesday, Dec. 8 at 7 p.m.
Mayer: Hearing and finalization set for Monday, Dec. 14, at 6:30 p.m.
Montrose: Hearing and finalization will be Monday, Dec. 14 at 7 p.m.
New Germany: Hearing will be Tuesday, Dec. 1, at 7 p.m.
Watertown: Hearing will be Tuesday, Dec. 8 at 6:30 p.m. Following the public hearing, the council will approve the budget and levy.
Waverly: Hearing set for Tuesday, Dec. 8 at 7 p.m., during the regular city council meeting. If more time is needed, the meeting will continue the following week.
Winsted: Hearing will be Tuesday, Dec. 1 at 6 p.m.