Property tax levy statement
Learn more about the 2018 Richfield property tax levy.
There have been some questions raised concerning the City’s 2018 Final tax levy of 6.11%, and how it relates to the City’s preliminary levy of 4.97% adopted by the City Council in September. The following explanation is to help citizens understand the 2018 tax levy adoption process and to answer any questions that residents may have.
For taxes payable in 2018, the City established a new taxing jurisdiction known as an Economic Development Authority (EDA). With the establishment of the EDA, under the authority of state statutes, the City also authorized an EDA tax levy of $560,000. Those funds will be used for business development and a number of dedicated programs in the City such as the “Kids at Home” program.
In September 2017, the City Council adopted the City’s tax levy which represented a 4.97% increase over the City’s previous year’s tax levy. In addition, there was also a separate Housing & Redevelopment (HRA) levy as there has been for several decades. The three tax levies, City, HRA and EDA, were submitted to Hennepin County as three separate levies. In the past, the tax levy of the HRA is shown as a separate levy on residents Truth in Tax (TNT) statements under Other Taxing Jurisdictions. It was the City’s belief that the Economic Development Authority (EDA) levy would be treated the same as the HRA levy, separate from the City’s preliminary gross levy.
However, in October, Hennepin County informed the City that the EDA levy, per MN State Statutes, must be included in the City’s gross tax levy, and is not classified as a separate special tax levy like the HRA.
Thus, the County added the EDA levy of $560,000 to the City’s preliminary levy and when the TNT statements were mailed out, the combination of the two levies reflected a greater percentage increase in the City’s tax levy than 4.97%.
When the City Council considered the adoption of the final City tax levy that now included the $560,000 dedicated to the newly established EDA on December 12, 2017, the Council voted to use $335,000 of reserve funds to reduce the City levy to a total 6.11% increase.
The bottom line for City taxpayers is that when you set aside the confusion in the percentages, the total City taxes to be levied for 2018 were reduced by $335,000 in December by the City Council.