2025 Final Levy & Budget PresentationDECEMBER 2, 2024Truth in Taxation2025 Tax Levy and Budget
Property Taxes CalculationBudget + DebtBudget + Debt – Non property tax revenues = Levy for property taxAssessed value X Rate = TaxLevy for property taxes / tax capacity = rateTax –credits –refunds = Net TaxNet Tax = Property Tax
Total Tax Levy Factors1.Market Value 2.Tax Capacity 3.Property Class Rates4.State Aids5.County Budget/Tax Levy6.School Operating Levy7.School District voter Approved Debt Obligations8.City Budget and Tax Levies9.Special State Laws; I.e. Credits and ExclusionsReason for tonight’s meeting and only item controlled by City
Budget Process OverviewPlanning (May – Aug.)Review of timelines, key issues and financial outlookDepartment Budget Requests (June – Aug.)Administration/Finance review of department requestsStaff Recommended Budget City Council Review (Aug. – Nov.)Council WorkshopsSet Preliminary Budget - Council Action (Sept.)•September 3, 2024 City Council approved a preliminary levy of 5.40%Truth in Taxation NoticeFinal Review and Adoption of Budget (Dec.)Truth-in-Taxation Hearing (proposed levy of 5.40%)Final Budget and Levy - Council Action
Budget History
Historical Change in Total Levy (%)Year Total Levy2014 2.96%2015 5.97%2016 4.98%2017 2.94%2018 2.89%2019 2.99%2020 4.76%2021 2.90%2022 4.99%2023 4.99%2024 16.04%Proposed 2025 5.40%
2025 Tax Levy2024 Total Levy $5,522,0712025 Total Levy $5,820,438oOperations Levy $2,721,294oCapital Levy $2,344,018oDebt Levy $ 755,126 2024 to 2025 Change in Levy (5.40%)oDebt Service Levy Increase .80% = $5,969oGeneral Levy decrease (.86%) = ($23,482)oCapital Levy Increase 15.57% = $315,880oTotal Levy Increase 5.40% = $298,367
2025 Budget – RevenueThe Revenue side of the budget determines where the funding comes from to pay for city expenses. We build the revenue budget as expenses are evaluated. Including determining the level of inflow we expect from:Licensing and PermitsOther Agencies and GovernmentsCharges for ServicesOther Misc. SourcesTax Levy amounts are then determined by category to meet the remaining funding required for operational needs, capital improvements, and debt service.
2025 Budget – Revenue
2025 Revenue Changes (+/-)Increase LGA: $2,457Increase Fire Contract: $124,575Increase Capital Levy: $315,880Decrease Gas Franchise: ($22,000)Decrease Cable Franchise: ($10,000)Decrease in Operations Levy: ($23,482)Decrease in Plan Check Fees: ($15,000)
2025 Expense Changes (+/-)Increase Police Protection: $21,500Increase Fire Department Operations: $37,409Decrease Building Department: ($11,958)Increase Capital: $315,880 (capital outlay)Decrease in Economic Development: (-$8,000)
Where the Tax Dollars Go
2025 Taxable Market ValueSeeing the Expense and Revenue sides of the budget process gets us part of the way there – but there is more to the story…BUDGET TAXABLE MARKET VALUESources and Uses Basis for Levy ApplicationRevenue Property ValuesExpense Residential (County Assessor)Commercial / Industrial (County Assessor) NET TAX CAPACITYFormula applied to Taxable Market Value Determined by State Including Homestead CreditsOverall, the City of Albertville’s Net Tax Capacity increased 3.04% Budgeted Levy Amounts and Net Tax Capacity ultimately determine the City’s Tax Rate.
2025 Tax Capacity ExplanationTax capacity is calculated by multiplying the property market value by the appropriate class rate percentage.Residential Homestead:First $500,000 of value: 1.00%Value over $500,000: 1.25%Commercial/Industrial:First $150,000: 1.50%Value over $150,000: 2.00%
2025 Residential City Tax Example2025 taxes payable($50k change in value)2025 taxes payable (no change in value)2024 taxes payableResidential$350,000.00$300,000.00$300,000.00Taxable Value1.00%1.00%1.00%Res. Homestead <$500k1.25%1.25%1.25%Res. Homestead >$500k3,500.003,000.003,000.00Tax Capacity42.81%42.81%41.85%City Tax Capacity Rate$1,498.35$1,284.30$1,255.50City Taxes Owed
2025 Commercial City Tax Example2024 taxes payable($500k change in value)2025 taxes payable (no change in value)2024 taxes payableCommercial$2,000,000.00$1,500,000.00$1,500,000.00Taxable Value1.50%1.50%1.50%First $150k 1.5%2.00%2.00%2.00%Over $150k 2.0%37,50027,50027,500Tax Capacity42.81%42.81%41.85%City Tax Capacity Rate$16,053.75$11,772.75$11,508.75City Taxes Owed
2025 Budget & Levy Summary2025 Total Budget (with capital) = $6,897,3562025 Total Levy $5,820,438Debt Service Levy = $755,126 (increase of $5,969)General Operations Levy = $2,721,294 (decrease of $23,482)Capital Levy = $2,344,018 (increase $315,880)Total Levy Increase= $298,367 (increase 5.40%)