00-0669R

RESOLUTION AUTHORIZING THE ST. LOUIS COUNTY AUDITOR TO FIX A PROPERTY TAX RATE FOR TAXES PAYABLE IN THE YEAR 2001 THAT IS HIGHER THAN THE TAX RATE CALCULATED PURSUANT TO MINNESOTA STATUTES SECTION 204B.135 FOR THE CITY FOR TAXES LEVIED IN 1999, COLLECTIBLE IN 2000, AS REQUIRED BY STATE LAW.

BY COUNCILOR HOGG:

WHEREAS, the city of Duluth adopted a proposed 2000 tax levy on September 11, 2000, in the amount of $9,658,700, resulting in an estimated tax rate of .261464 for the year 2001, which is higher than the year 2000 tax rate of .26126; and

WHEREAS, the city of Duluth must comply with a new Minnesota state tax law requiring cities to pass a resolution regarding tax rate changes based on last year's levy less the general obligation debt levy compared to the proposed 2001 levy less the general obligation debt levy;

NOW, THEREFORE, BE IT RESOLVED, that the Duluth City Council hereby authorizes the St. Louis County auditor to fix a property tax rate for taxes payable in the year 2001 that is higher than the tax rate calculated pursuant to Minnesota Statutes, Section 204B.135 for the city for taxes levied in 1999, collectible in 2000.

RESOLVED FURTHER, that adoption of this resolution would not prevent the city from certifying a final levy that would result in no tax rate increase or tax rate decrease under the formula set forth in Minnesota Statutes, Section 204B.135.



STATEMENT OF PURPOSE: On September 11, 2000, the city adopted a proposed, maximum 2001 property tax levy of $9,658,700. This levy would result in a maximum tax rate of .261646 in 2001. This rate is slightly higher than the 2000 tax rate of .261260. A new state law beginning in 1999, requires the county auditor to calculate the change in the tax rate by applying a formula which does not include the levy for general obligation debt service, and does not include any adjustment for growth in the tax base. If the county auditor's computed tax rate results in an increase over the calculated base tax rate from last year, the city must authorize the county auditor to fix a higher property tax rate than the tax rate calculated pursuant to the law.

The law requires the adoption of such resolution after a public hearing. The resolution must be filed with the county auditor by October 20. In the city's case, failure to adopt and file this resolution would require the county auditor to reduce the maximum tax levy certified by the city in September by $666,800. The adoption of this resolution would not prevent the city from certifying a final levy that would result in no tax rate increase or a tax rate decrease.