MCLEOD COUNTY

Property Taxes Payable2013

Taxing District Values & Rates

How to Calculate a Tax

Example of Tax Statement

Example of Truth in Taxation Notice

Definitions of Property Tax Terminology

Cindy SchultzMcLeod County Auditor-Treasurer

2391 Hennepin Avenue NorthGlencoe, MN 55336

(320) 864-1210Email address: cindy.schultz@co.mcleod.mn.us

1

Page

McLeod County 2013 Organization 1

Why Property Taxes Vary From Year to Year 2

"Who does what" in the Property Tax Process 4

Understanding Your Property Assessment 6

Do You Think Your Property is Over-Assessed? 8

Property Tax Classification Rates 9

Property Tax Classification Rates Comparison 10

Three Year Comparison Taxable Market Value, Net Tax 12 Capacity, Tax Increment Capacity, and Local Tax Rate

Total Local Tax Rates by Taxing District 13

Total Values and Tax Rates by Taxing Entity 17

How Your Property Taxes are Determined 19

How to Calculate a Property Tax 20

Residential Homestead Market Value Exclusion and 21 Agricultural Homestead Market Value Credit

Summary of the Statewide General Tax 22

How to Read Your Proposed Property Tax Notice 23

Example of Proposed Property Tax Notice 24

How to Read Your Tax Statement 25

Example of Property Tax Statement 26

Taxing Entities Net Capacity Levies 27

Taxing Entities Market Value Levies 28

Four Year Comparison of Gross Tax Levy 29

Minnesota Property Tax System 30

Tax Glossary 31

Appendix - Resources 35Booklet Prepared by:

Cindy Schultz, McLeod County Auditor-Treasurer

CONTENTS

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County Commissioners: Term Expires1st District Ron Shimanski January 20172nd District Kermit Terlinden January 20153rd District Paul Wright January 20174th District Sheldon Nies January 20175th District Jon Christensen January 2015

Elected County Officers:County Attorney Michael K. Junge January 2015County Auditor Cindy Schultz January 2015County Recorder Lynn Ette Schrupp January 2015County Sheriff Scott Rehmann January 2015Judge of District Court - Seat 26 Michael R. Savre January 2019Judge of District Court - Seat 29 Terrence E. Conkel January 2019

Appointed Department Heads:County Administrator Pat MelvinCounty Assessor Sue SchulzCounty Environmentalist Roger BerggrenCounty Highway Engineer John BrunkhorstCounty Information Systems Manager Vincent TraverCounty Nursing Director Kathy NowakCounty Parks Superintendent Allan KoglinCounty Social Services Director Gary SprynczynatykCounty Solid Waste Administrator Ed Homan Jr.County Zoning Administrator Larry GasowCounty Veterans Service Officer Jim LauerCourt Administrator Karen Messner

Appointed Positions:County Agricultural Inspector Allan KoglinCounty Building Services Wayne RosenfeldCounty Coroner Dr. Quinn StroblCounty Emergency Services Director Kevin MathewsCounty Extension Technical Advisor Nathan WinterCounty Extension 4-H Coordinator Jill GramsCounty GIS Director Christy ChristensenCounty Human Resources Mary Jo WieselerCounty Surveyor Jeff Rausch

McLeod County 2013 Organization

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1. The market value of your property may change. Each parcel of property is assessed at least once every five years.

Each year a sales ratio study is done to determine if the property is assessed similarly to like properties.

You may make additions or improvements to your property which increases its market value.

2. If the market value of a property increases more or less than the average increase or decrease

in a taxing district, the taxes on that property will also change. New construction in a taxing district increases the tax base and will affect the district's tax rate.

3. The State General Property Tax may change. The State Legislature directly applies a State General Property Tax to commercial/industrial

and seasonal/recreational property classes.

4. The County Budget and Levy may change. Each year a county reviews the needs and wants of their citizens and how to meet those

discretionary needs and wants. Also included in the county budget is non-discretionary spending which is required by state and federal mandates and court decisions and orders. As much as sixty to eighty-five percent of the county expenditures are used to deliver mandated services.

5. The City Budget and Levy may change. Each year cities review the needs and wants of their citizens and how to meet those needs and

wants. This is called "discretionary spending" in the city budget. Also included in the budget is non-discretionary spending which is required by state and federal mandates and court decisions and orders.

6. The Township Budget and Levy may change. Each year in March townships set the levy and budget for the next year.

7. The School District's Budget and Levy may change. The Legislature determines basic funding levels for K-12 education and mandates services that

schools must perform. On average, approximately seventy percent of school costs are paid by the state.

Local school districts set levies for many purposes including transportation, community education, safe schools, etc.

8. A Special Districts Budget and Levy may change. Special districts such as the hospital districts, watershed districts, libraries, etc. set levies to

balance their budgets.

Why Property Taxes Vary From Year to Year

14 Reasons Your Property Taxes Might Go Up (or Down)

The market value of other properties in your taxing district may change, shifting taxes from one property to another.

4

9. Voters may have approved a School, City, Town, or County Referendum. Local referendums may be held for local government construction projects, excess operating

levies for schools or many other purposes.

Referendum levies may be spread on the market value or the tax capacity of a property depending on process and type of referendum levy.

10. Federal or state mandates may have changed. Both the state and federal governments require local governments to provide certain services

and follow certain rules. These mandates often require an increase in the cost and level of service delivery.

Each year the legislature reviews and adjusts the level of funding for a variety of aids provided to local governments including Local Government Aid (LGA), Disparity Reduction Aid (DRA), and County Program Aid (CPA). The formulas for how aid is determined and distributed among local governments may have changed.

While direct aid and revenue from the federal government to local governments has declined greatly in recent years, federal revenue continues to be a key portion of the local government revenue stream and that revenue stream may have changed.

12.

A change in class rates will require a change in the tax rate to raise the same amount of money.

13. Fiscal disparities, personal property taxes on utilities properties, limited market value, and tax

increment financing are examples of laws that affect property taxes.

14. Special assessments may have been added to your property tax bill. Water lines, curb and gutter, and street improvements that directly benefit your property may

be funded, in whole or in part, through a special assessment that is added to your property tax bill.

Aid and Revenue from the State and Federal government may have changed.

The state legislature may have changed class rates, shifting taxes in your area.

Other State Law changes may adjust the tax base.

5

ASSESSOR

Town or City Board of Review * The town board or city council meets between April 1 and May 31.

County Board of Equalization * The county board of commissioners meets during the last two weeks in June.

State Board of Equalization * The commissioner of revenue meets between April 15 and June 30. The review board may change the estimate of the market value or the classification.

Minnesota Tax Court * Small claims or regular division.

TAXING Your School District, Township or City, County, etc. DISTRICTS

Prepares proposed budget/levy amounts.

Sends proposed levy amounts to County Auditor by September 15.

Holds Truth-in-Taxation hearings on budgets.

Sends final levy to the County Auditor by December 28.

Determines the services (such as street maintenance, fire, and police Estimates the costs of those services and determine what portion will come

"Who Does What" in the Property Tax Process

Locates the property to be taxed; estimates its market value (how much the property would sell for in today's market); and assigns it to a class according to its use. The value established as of January this year determines the taxes you pay next year.

Sends out notices in the spring to those whose property has changed in value and/or classification.

Multiplies the estimated market value of each piece of property by the tax capacity percentage set by law for its class. The result is the tax capacity.

Adds together the tax capacities for all the property in the taxing district and gives the totals to the County Auditor.

Property owners who disagree with the Assessor may appeal to the Boards of Review.

6

AUDITOR-TREASURER

Calculates tax increment captured percentages.

Adjusts tax capacity for tax increment.

Calculates the amount of each property owner's proposed tax.

For Final Taxes:

Recalculates tax increment captured percentages.

Adjusts tax capacity for tax increment.

Adds special assessments to the tax statements as certified by municipalities

For Proposed "Truth-in-Taxation" Taxes:

Determine the tax capacity rates by dividing the proposed levy by the proposed total amount of tax capacity in the taxing district.

Prepares a Truth-in-Taxation notice for each taxpayer to be mailed by November 24.

Recalculates the tax capacity rates by dividing the final levy by the final total Recalculates the amount of each property owner's tax based upon the final

Makes out the property tax statements from the county tax list. Mails out the Property owners mail in their payments (due in two installments on May 15 and As tax dollars are collected, prepares settlements of money to taxing districts. Determines settlement amounts for current year and delinquent settlements to

7

Understanding Your Property AssessmentIn Minnesota, property taxes provide most of the funding for local government services. McLeod County collects the taxes and distributes the money between the county, cities, townships, school districts and special districts such as the Region 6E and Watershed Districts. Each property's share of taxes is determined according to its value, use, and the property tax levies. Assessors are responsible for estimating property values and setting property classification for tax purposes.

Who are these appraisers and what are their credentials?

The McLeod County Assessor's Department offers assessing services, via contract, to all districts of the county. Appraisers in McLeod County are professionals. Stringent training and experience requirements are set by the Minnesota State Board of Assessors which governs and administers licensure of appraisers. McLeod County requires additional training and encourages continuous education in the areas of management, organization and customer service. We provide incentives to employees to make these educational opportunities more attractive.

What does the Assessor do?

* Accepts Applications for Property Tax Credits

The Minnesota property tax law provides certain credits or forms of special tax relief, one of the more common being the Homestead Credit. Application for Homestead Classification; Application for Agricultural Tax and Special Assessment Deferment; Application for Market Value Exclusion on Homestead of Disabled Veterans with Total and Permanent Disabiltiy; Application for Market Value Exclusion on Homestead Property of Disabled Veterans with 70 Percent or More Disabilty; Applications for Special Disability Classification; Application for Tax Exemption are among programs of interest to property owners. Please call the Assessor's Office if you think you may qualify.

* Estimates Value

The law specifically requires that assessors view each parcel of real estate to appraise its market value. Property values change continuously with changing economic conditions. In addition to market changes, numerous physical changes affect the value of land and buildings. All factors that may influence value must be considered when estimating the value of property. This task requires a physical inspection of all property subject to assessment.

* Classifies Property

The assessor also determines the classification or use of each parcel. For instance, property may be residential homestead (owner-occupied), relative residential homestead (relative of owner is occupant), residential non-homestead, agricultural, or commercial/industrial. Each classification is taxed and receives credits at a different percentage of market value. These percentages are set by the State Legislature.

What is Market Value?

Minnesota Statute 272.03 defines "market value" as "the usual selling price . . . at the time of assessment". It is "the price that could be obtained at a private sale or an auction sale, if the assessor determines that the price from an auction sale represents an arms-length transaction. The price obtained at a forced sale shall not be considered". In other words . . .

Market Value = the price that would prevail under competitive, open-market conditions.

How does the Assessor determine market value?

State law requires that the value and classification of real estate be established as of January 2 each year. The Assessor's Office works throughout the year to estimate the market value of each property for the following January 2 assessment date.

* Physically Inspects Property

Every fourth year, an appraiser will physically review the property, both the interior and exterior. If the owner is not home, a door tag is left explaining the inspection process. The appraiser will still perform an exterior review at that time. In addition, all new construction, alterations or improvements will be viewed in the current year.

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* Gathers Information

The appraiser gathers information on all characteristics of the property that affect market value, such as size, age, quality, basement finish, and also extra features such as fireplaces, extra baths, walkouts, etc.

* Estimates Value

The property characteristics are entered into a computerized system. The computer aids the appraiser in estimating the property value. Information from actual sales is used to update the computer model and set the table schedules which are used to update your market value. The market value estimated by the assessor should be at, or very close to, the amount the property would sell for if placed on the open market. The State Board of Equalization requires the overall level of assessment to be between 90% and 105% of market value. Assessors in McLeod County consistently meet this standard.

* Notification

A Valuation Notice is mailed each spring to every property owner in McLeod County. The assessment on January 2 forms the basis for the following year's real estate taxes. That is, the value and classification set by the Assessor on January 2, 2009, is used to calculate the taxes payable in the year 2010.

How You Can Appeal Your Market Value and Property Classification

If you disagree with your estimated market value or classification, you may appeal in one of the following ways:

* Step One: City or Town Board of Review

Your first official opportunity to appeal your property valuation or class is at the City or Town Board of Review. It is suggested that you call the Assessor's office at the telephone number listed on your Value Notice, and discuss your concerns and ask any questions you may have. You may ask for an appointment for a physical review of your property. You may make your appeal in person, through a designated representative, or by sending a letter. If your appeal is unsuccessful, proceed to step two. NOTE: If you do not first appeal to the local Board of Review, your appeal cannot be heard by the County Board of Equalization.

* Step Two: County Board of Equalization

Appeals to the County Board of Equalization can be made in person, through a designated representative or by sending a letter. To schedule an appointment for your appeal, call the County Auditor-Treasurer's Office at the number shown on your Value Notice. If you are dissatisfied with the results of your appeal to the County Board of Equalization, you may continue your appeal to step three, the Minnesota Tax Court.

* Step Three: Tax Court

There are two divisions of the Minnesota Tax Court: The Small Claims and Regular Division.

The Small Claims Division will hear appeals involving homestead property providing there is only one dwelling unit per parcel per petition, or any property with an estimated market value of less than $300,000. The Small Claims Division is quite informal with a more relaxed atmosphere than the Regular Division. The proceedings are not recorded and the decisions do not set legal precedent. All decisions of the Small Claims Division are final and cannot be appealed to another court. The cost of filing may be obtained by calling the McLeod County Court Administrator's Office.

The Regular Division will hear all appeals. The Regular Division is more formal than the Small Claims Division. Taxpayers are often represented by an attorney. Ordinary rules of court and evidence apply and the proceedings are recorded. Decisions of the Regular Division can be appealed to a higher court. The cost of filing an appeal may be obtained by calling the McLeod County Court Administrator's Office.

One-Step AppealAppeals may be made directly to the Regular Division of the Minnesota Tax Court without utilizing the City or Town Board of Review and the County Board of Equalization. The Regular Division is described above.

Information About Filing in Tax CourtAll appeals to Tax Court must be filed on or before April 30th of the year the tax becomes payable. Specific instructions on how to appeal to Tax Court, as well as forms for same, can be obtained by visiting the Minnesota Tax Court website, by contacting the Minnesota Tax Court at 25 Constitution Avenue, St. Paul, MN 55155, or from the McLeod County Court Administrator's Office.

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1-Step Appeal

Check the facts

Compare neighboring property values

Seek an adjustment

2-Step Appeal Meets in April or May

Appeal in person or by letter

Call city or town clerk for appointment

3-Step Appeal Meets some time the last two weeks in June

Appeal in person or by letter

Call County Auditor or Assessor for appointment

4-Step Appeal

Appeal by April 30 of year following assessment

Attorney recommended Attorney not necessary

Decisions appealable to Supreme Court Decisions final

Can be used for any property Use for your home, or any propertyassessed under $300,000

Must be used for property assessed over

$300,000

Regular Division Small Claims Division

The diagram below shows the steps in contesting your property valuation:

Do You Think Your Property is Over-Assessed?

Visit Your Local Assessor's Office

Appeal to City or Town "Board of Review"

Appeal to County "Board of Equalization"

Appeal to the Minnesota Tax Court

10

Residential Homestead First $500,000 of market value 1.00% Yes No Value over $500,000 1.25% Yes No Residential Non-Homestead First $500,000 of market value 1.00% Yes No Value over $500,000 1.25% Yes No Commercial and Industrial First $150,000 of market value 1.50% Yes Yes Value over $150,000 2.00% Yes Yes Farm Homesteads House, garage, one acre First $500,000 of market value 1.00% Yes No Value over $500,000 1.25% Yes No Remainder of Farm: First $1,290,000 of market value 0.50% No No Value over $1,290,000 1.00% No No Farm Non-Homesteads House, garage, one acre First $500,000 of market value 1.00% Yes No Value over $500,000 1.25% Yes No Land 1.00% No No Residential Rental (Apartments) 2-3 units 1.25% Yes No 4 or more units 1.25% Yes No Seasonal Cabins (Non-Commercial) First $500,000 of market value 1.00% No Yes-40% Value over $500,000 1.25% No Yes

HOW TO USE THE CLASSIFICATION RATES:

Property Tax Classification Rates

What They Are, How They Work

Determine the Taxable Market Value and Classification the Assessor's Office has assigned to the property.

Multiply the Market Value by the State Legislature mandated percentage (classification rate) based on the Classification of the Property (these percentages are uniform statewide). The result of this computation is called the Net Tax Capacity.

Payable 2013 Classification Rates range from .45% to 2.00%. Classification Rates for selected property classes are shown below:

Example: Suppose your home is valued at $100,000 Residential Homestead.

Your Home's Tax Capacity Equals:($100,000 X 1%) = 1,000

NTC CLASS RATE

SUBJECT TO

RMV TAX

SUBJECT TO STATE

TAXPROPERTY TYPE

11

Payable Payable Payable Payable Payable2009 2010 2011 2012 2013

(1a) Residential Homestead:

first $500,000 1.00% 1.00% 1.00% 1.00% 1.00%

over $500,000 1.25% 1.25% 1.25% 1.25% 1.25%

(1b) Disabled Homestead:

first $50,000 0.45% 0.45% 0.45% 0.45% 0.45%

(4bb) Residential Non-Homestead:

first $500,000 1.00% 1.00% 1.00% 1.00% 1.00%

over $500,000 1.25% 1.25% 1.25% 1.25% 1.25%

Residential Rental (Apartments)

(4b 1) 2-3 units 1.25% 1.25% 1.25% 1.25% 1.25%

(4a) 4 or more units 1.25% 1.25% 1.25% 1.25% 1.25%

(4d) Low Income Apartments: 0.75% 0.75% 0.75% 0.75% 0.75%

(3a) Commercial/Industrial /Public Utility:

first $150,000 1.50% 1.50% 1.50% 1.50% 1.50%

over $150,000 2.00% 2.00% 2.00% 2.00% 2.00%

Seasonal Recreational:

(1c) Homestead Resorts

first $600,000 0.55% 0.50% - - -

$600,001 - $2,300,000 1.00% 1.00% - - -

$over $2,200,000 1.25% 1.25% - - -

first $600,000 - - 0.50% 0.50% 0.50%

$600,001 - $2,300,000 - - 1.00% 1.00% 1.00%

$over $2,300,000 - - 1.25% 1.25% 1.25%

(4c) Seasonal Resorts Commercial

first $500,000 1.00% 1.00% 1.00% 1.00% 1.00%

over $500,000 1.25% 1.25% 1.25% 1.25% 1.25%

(4c 1) Seasonal Resorts Non-Commercial

first $500,000 1.00% 1.00% 1.00% 1.00% 1.00%

over $500,000 1.25% 1.25% 1.25% 1.25% 1.25%

Property Type

Property Tax Classification Rates Comparison

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Payable Payable Payable Payable Payable2009 2010 2011 2012 2013

Agricultural Homestead:

(2a) House, Garage, One Acre

first $500,000 1.00% 1.00% 1.00% 1.00% 1.00%

over $500,000 1.25% 1.25% 1.25% 1.25% 1.25%

(2a) Remainder of Farm

first $890,000 0.50% - - - -

over $890,000 1.00% - - - -

- 0.50% - - -

- 1.00% - - -

- - 0.50% - -

- - 1.00% - -

- - - 0.50% -

- - - 1.00% -

- - - - 0.50%

- - - - 1.00%

(2b) Non-Homestead 1.00% 1.00% 1.00% 1.00% 1.00%

first $1,290,000

over $1,290,000

Property Tax Classification Rates Comparison

first $1,210,000

over $1,210,000

Property Type

first $1,010,000

over $1,010,000

first $1,140,000

over $1,140,000

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Actual Actual Actual2011 2012 2013

A. Taxable Market Value 3,478,412,000 3,139,603,800 3,144,089,900

B. Total Net Tax Capacity 34,046,577 30,682,870 30,651,501

C. Tax Increment 418,970 450,203 407,452

D. Local Taxable Tax Capacity 33,627,607 30,232,667 30,244,049

E. Local Tax Rate 54.722% 59.889% 60.854%

B - C = D (Local Taxable Tax Capacity)

Three Year Comparison of Taxable Market Value, Net Tax Capacity,

Tax Increment Capacity, and Local Tax Rate

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Unique School Watershed Local Tax MV RefTaxing District Municipality District District Rate Rate

Townships:

Acoma

Bergen

Collins

Glencoe

Hale

Hassan Valley

91.843% 0.20762%

81.034% 0.18899%

96.501% 0.18899%

81.429% 0.18899%

86.766% 0.20921%

75.221% 0.18899%

76.129% 0.18899%

92.855% 0.18899%

89.105% 0.20762%

0.20921%87.810%

83.142% 0.18899%

91.623% 0.27215%

92.531% 0.27215%

94.637% 0.20762%

97.566% 0.15524%

82.234% 0.18899%

005

TOTAL TAX RATES FOR TAXES PAYABLE IN 2013

0101 0423

0102 0465

0201 2859

0202 2859 005

005

0203 0424

0204 0424 005

018

03042159

Old 2887005

03012859

Old 2887005

0302 0423 005

0401 2859

0402 2859

03032159

Old 2887

0501 2859

0603 0423

06012859

Old 2887

0602 2859

15

Unique School Watershed Local Tax MV RefTaxing District Municipality District District Rate Rate

Townships:

Hassan Valley

Helen

Hutchinson

Lynn

Penn

Rich Valley

0.27215%83.394%

0.18899%74.005%

0.25165%90.248%

0.20762%86.322%

0.18899%82.482%

0.18899%81.574%

0.20762%91.324%

0.20762%90.416%

0.18899%75.908%

005

005

018

018

0.25165%88.296%

0.20921%88.985%

0.18899%80.158%

0.18899%81.202%

0.18899%94.322%

0.18899%95.366%

0702 2859

0801 0423

005

0802 2859

0901 0423

005

TOTAL TAX RATES FOR TAXES PAYABLE IN 2013

0604 0423

0701 2859

005 0.20762%92.751%

10012365

Old 2887

10022859

Old 2887

0902 0423

09032159

Old 2887

10032859

Old 2887005

1004 2859 018

1101 2859

1102 0424

1005 2859

10062365

Old 2887

16

Unique School Watershed Local Tax MV RefTaxing District Municipality District District Rate Rate

Round Grove

Sumter

Winsted

114.027%

Jobz 27.017%

Silver Lake Fire0.27215%92.551%

0.18899%84.790%

0.27215%94.179%

0.14828%

0.18899%92.650%

0.18899%93.694%

0.25165%86.624%

0.20921%86.561%

0.25165%88.576%

0.20921%87.605%

0.18899%92.165%

0.18899%91.257%

0.25165%78.578%

0.20762%87.507%

0.18899%78.001%

0.18899%77.093%

005

005

005

TOTAL TAX RATES FOR TAXES PAYABLE IN 2013

12012365

Old 2887

Townships:

018

12042159

Old 2887018

12052365

Old 2887

12022859

Old 2887

12032859

Old 2887005

018

13012859

Old 2887

13022859

Old 2887

12062159

Old 2887

1207 2365

1305 0423

1401 0424

1303 2859

1304 2859

1404 0424

1402 2859

1403 2687

17

Unique School Watershed Local Tax MV RefTaxing District Municipality District District Rate Rate

Lester Prairie Fire 92.675%

Jobz 13.912%

Silver Lake Fire

Cities:

Biscay

Brownton

Lester Prairie

Plato

Silver Lake

Stewart Urban 288.282%

Jobz 44.503%

Rural

Urban 279.218%

Jobz 41.439%

Rural

Winsted 183.760%

Jobz 50.925%

Glencoe 157.016%

Jobz 31.201%

Hutchinson 153.352%

Jobz 29.970%

0.18899%315.304%

0.18899%121.447%

0.20762%

0.18899%

0.27215%

0.14828%

0.20921%

0.20921%

0.20921%

0.20921%

99.763%

98.719%

164.372%

0.18899%212.437%

0.18899%162.869%

0.27215%176.214%

2004

2101

2102

2201

2301

1801

1901

2001

2002

2003

005

2159 Old 2887

005

2159 Old 2887

005

0423

2687

424

2859

2859 005

2859

2159 Old 2887

018

2159 Old 2887

018

1701 0424

TOTAL TAX RATES FOR TAXES PAYABLE IN 2013

1405 0424

1406 2859

Townships:

1501 2859

16012859

Old 2887005

0.18899%83.162%

0.27215%

18

Local MarketTaxable Total Net Taxable Local Value

Taxing District Market Tax Tax Tax ReferendaValue Capacity Capacity Rate Rate

McLeod County: 3,144,089,900 30,651,501 30,244,049All Townships 60.854% -

Jobz 20,658,700 408,554 408,554 0.000%Biscay City 60.854% -Brownton City 57.402% -Glencoe City 59.383% -Hutchinson City 59.664% -Lester Prairie City 60.437% -Plato City 58.863% -Silver Lake City 59.207% -Stewart City: 2001 - Urban 56.258% - 2002 - Rural 60.854% - 2003 - Urban 52.135% - 2004 - Rural 60.854% -Winsted City: 2101 60.634% - 2102 60.854% -Townships:Acoma 162,994,300 1,443,931 1,443,931 16.483% -Bergen 159,849,900 1,379,803 1,379,803 14.494% -Collins 126,479,700 1,025,559 1,025,559 10.043% -Glencoe 123,934,200 1,002,441 1,002,441 7.481% -Hale 148,683,000 1,241,160 1,241,160 13.294% -Hassan Valley 131,367,000 1,095,755 1,095,755 13.689% -Helen 163,482,800 1,373,398 1,373,398 13.834% -Hutchinson 169,299,000 1,530,376 1,530,376 8.168% -Lynn 118,912,800 897,069 897,069 12.262% -Penn 111,358,800 838,375 838,375 11.510% -Rich Valley 139,486,200 1,140,994 1,140,994 6.265% -Round Grove 116,153,000 965,618 965,618 9.838% -Sumter 124,941,700 1,015,745 1,015,745 9.353% -Winsted Total 155,675,400 1,265,432 1,265,432 1401 - W Fire 18,903,000 139,613 139,613 17.050% - 1402 - W Fire 4,725,000 34,535 34,535 17.050% - 1403 - W Fire 59,994,100 517,130 517,130 17.050% -

Jobz 1,605,100 32,102 32,102 0.000% - 1404 - SL Fire 1,676,400 12,905 12,905 15.422% - 1405 - LP Fire 58,481,600 473,529 473,529 15.546% -

Jobz 971,400 19,428 19,428 0.000% - 1406 - SL Fire 11,895,300 87,720 87,720 15.422% -Cities:Biscay 3,278,100 32,845 32,845 53.707% -Brownton 15,202,500 161,817 161,817 239.726% -Glencoe 228,928,400 2,670,991 2,479,163 90.495% -

Jobz 5,230,900 103,868 103,868 31.201% -Hutchinson 723,587,300 8,994,156 8,778,532 73.230% -

Jobz 5,855,500 115,610 115,610 22.203% -Lester Prairie 56,575,400 640,578 640,578 99.941% -Plato 16,536,000 200,286 200,286 98.854% -Silver Lake 30,353,100 325,166 325,166 148.224% -Stewart Total 15,550,900 179,399 179,399 2001 Urban 8,230,400 95,558 95,558 219.967% -

Jobz 240,400 4,363 4,363 36.740% - 2002 Rural 601,800 4,537 4,537 21.996% -

Values And Tax Rates For Taxes Payable In 2013

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Local MarketTaxable Total Net Taxable Local Value

Taxing District Market Tax Tax Tax ReferendaValue Capacity Capacity Rate Rate

Cities Continued: 2003 Urban 5,903,200 71,716 71,716 219.967% -

Jobz 483,900 9,436 9,436 36.740% - 2004 Rural 815,500 7,588 7,588 21.996% -Winsted Total 101,460,400 1,230,607 1,230,607 2101 101,424,400 1,230,247 1,230,247 87.243% -

Jobz 6,271,500 123,747 123,747 24.089% - 2102 36,000 360 360 87.243% -School Districts:#0423-Hutchinson 1,288,782,500 13,835,462 13,619,838 Townships 1,083,633,575 Ref MV 17.069% 0.20762% 2301 Hutchinson 16.807% 0.20762%

Jobz 5,855,500 115,610 115,610 7.767% -#0424-Lester Prairie 248,040,500 2,237,049 2,237,049 Townships 165,599,400 Ref MV 16.044% 0.27215% Lester Prairie City 15.605% 0.27215% 2102 Winsted City 16.044% 0.27215%#0465-Litchfield 479,200 3,941 3,941 19.998% 0.15524%

142,300 Ref MV#2159-BLH 114,587,600 961,180 961,180 Townships Old 2887 34,027,100 Ref MV 14.730% 0.20921% 2001 Stewart Old 2887 9.874% 0.20921%

Jobz 240,400 4,363 4,363 7.763% - 2002 Stewart Old 2887 14.730% 0.20921% 2003 Stewart Old 2887 5.977% 0.20921%

Jobz 483,900 9,436 9,436 4.699% - 2004 Stewart Old 2887 14.730% 0.20921%#2365-GFW 136,198,100 1,086,407 1,086,407 Townships Old 2887 18,600,100 Ref MV 15.701% 0.25165% 1207 Round Grove 7.655% 0.25165%#2687-WHLW 161,418,500 1,747,377 1,747,377 1403 Winsted Twp 147,544,000 Ref MV 35.892% 0.14828%

Jobz 1,605,100 32,102 32,102 27.017% - Winsted City 2101 35.652% 0.14828%

Jobz 6,271,500 123,747 123,747 26.836% -#2859-GSL 1,194,583,500 10,780,085 10,588,257 Townships Old 2859 668,562,430 Ref MV 6.655% 0.18899% Townships Old 2887 20.819% 0.18899% Biscay City 6.655% 0.18899% Brownton City 17.037% 0.18899% Glencoe City 5.999% 0.18899%

Jobz 5,230,900 103,868 103,868 0.000% - Plato City 4.013% 0.18899% Silver Lake City 4.775% 0.18899%Special Taxing Districts#005 Buffalo Creek 844,360,200 7,768,667 7,576,839 0.908% -#018 High Island 182,826,500 1,493,496 1,493,496 1.952% -#098 HHRA 723,587,300 8,994,156 8,778,532 1.709% -#098 HEDA 723,587,300 8,994,156 8,778,532 1.711% -County Wide:Region 6E 3,144,089,900 30,651,501 30,244,049 0.231% -State Wide General Tax:Commercial/Industrial 6,201,050 6,201,050 52.523% -Seasonal Residential Rec 59,602 59,602 22.327% -

Values And Tax Rates For Taxes Payable In 2013

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Box 1 Box 4

Total Assessor'sProposed Local Market Value

Budget

- minus x times

Box 2 Box 5

Non-Property Tax StateRevenue, eg: Mandated

*State Aid Class Rates*Fees, etc.

= equals = equals

Box 3 Box 6

Property Tax TotalRevenue Needed divided by "Net Tax Capacity"

(Levy) (Formerly Assessed

Value)

= equals

Box 7

PropertyTaxRate

(Tax Capacity Rate)

How Your Property Taxes Are Determined

YOUR PROPERTY TAX EQUALS

(Your Property's Market Value X Classification Rate(s)) X Tax Capacity Rate

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1. Market Value of $100,000 classified as Residential Homestead.

2. Calculate the Tax Capacity reducing it by the Market Value Exclusion:

The first 76,000 X 40% = 30,400 100,000 - 76,400 = 24,00024,000 X 9% = 2,160 30,400 - 2,160 = 28,240 (Market Value Exclusion Amount)100,000 - 28,240 = 71,760 (Taxable Market Value)

71,760 x 1.00% = 718

3. Determine the Tax Rate:

4.

718 x 1.57016 = $1,127.37100,000 x 0.0018899 = 188.99

Total………………… $1,316.36

Calculate the Gross Tax (excluding special assessments):

How To Calculate A Property Tax

*** Example ***

(718 equals the net tax capacity)

Assume the property is located in the City of Glencoe, in School District #2859, and in Buffalo Creek Watershed (005). The payable 2013 local tax rate is 157.016% and the payable 2013 market value referenda rate is 0.18899%.

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Calculation Example: Residential Homestead Market Value of $100,00076,000 X 40% = 30,400 100,000 - 76,400 = 24,00024,000 X 9% = 2,160 30,400 - 2,160 = 28,240 (Market Value Exclusion Amount)100,000 - 28,240 = 71,760 (Taxable Market Value)

Calculation Procedure:

Taxable Market Value Credit

Up to and including $115,000 0.30% X Taxable Market Value

Over $115,000 but less than $345,000

$345,000 and over $230

Credit Provisions : Rate 0.30% of Taxable Market Value Excluding House, Garage, and One Acre of the first $115,000 of taxable market value, up to a maximum credit $345.00. However, it is to be reduced by 0.5% of taxable market value in excess of $115,000, subject to a maximum reduction of $115 which is reached at a taxable market value of $345,000. Agricultural homesteads with taxable market values over $345,000 will receive a credit of $230 ($345 - $115).

$345 - 0.05 (Total Taxable Market Value - $115,000)

Residential Homestead Market Value Exclusion

Eligible Property - All homestead property less than $413,800 in value will receive a Homestead Market Value Exclusion; property classified as follows: Residential Homestead, Blind/Paraplegic Veteran/Disabled Homestead, House, Garage and One Acre Only (does not apply to any other land or buildings). Homestead property no longer receives a credit that reduces the property taxes paid. Instead, a portion of the homestead's property value will be excluded from taxation.

Exclusion Provisions : The Homestead Market Value Exclusion excludes from taxation 40% of the value on the first $76,000 of a property's value. The amount excluded is reduced as the value rises above $76,000. (the exclusion reduction is equal to 9% pf the value above $76,000). Homesteads valued more than $413,800 will receive no homestead exclusion.

Agricultural Homestead Market Value Credit

Eligible Property - Agricultural Homestead Property Excluding House, Garage and One Acre (house, garage, and one acre receive the residential homestead credit). (Does not apply to non-homestead agricultural buildings and land or to timberlands).

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Statewide General TaxBackgroundDuring the 2001 legislative session, Minnesota enacted the first state property tax since taxes payable in 1967. The tax is only on certain properties and is part of a property tax reform law. Revenue from the new tax will be deposited in the state general fund with some of the money earmarked specifically for education funding.

Is my property affected by the state general tax?In general, there are two types of property that must pay the state general tax:

1. Commercial-Industrial

2. Seasonal recreational property, including cabins

How much is the tax?There are various factors that will determine how much tax you pay. Some of the factors are the market value and type (class) of property you have and the state tax rate.

Generally speaking, the higher the value of your property, the greater that state tax. However, the taxes on a noncommercial cabin are calculated a little differently than taxes on other affected properties.

The first $76,000 in market value of a cabin will be taxed differently for state property tax purposes than it is for local property tax purposes. For example, if you have a cabin valued at $100,000, only 40% of the first $76,000 of market value would be subject to the new tax and the remaining $24,000 would be taxed at its full value.

The Minnesota Department of Revenue will calculate the tax rates annually. Each year there will be different rates but there is only one set of rates for the entire State. The rates will be certified each year on November 1. For taxes 2013 commercial-industrial property tax rate is 52.523% and seasonal residential recreational property tax rate is 22.327%. This rate applies to the net tax capacity of the affected properties. Net tax capacity is a small percentage of a properties market value. The percentage varies by property class.

The rate is determined by the relative amount of statewide commercial-industrial and seasonal residential recreational property value in relation to the expenditure needs that have been established.

For the first year in 2002, $592 million needs to be raised from the state tax. Under current law each subsequent year's amount will be increased from the previous year's amount by using the increase (if any) in the implicit price deflator for government consumption expenditures and gross investments published by the U.S. Bureau of Economic Analysis. This is basically an index of inflation.

What is the tax for?The state property tax will be paid to the County Treasurer at the same time that local property taxes are paid. The payment of state and local property taxes to the County Treasurer is to be a combined payment. Separate payments are not to be made. Unlike other property taxes, the money raised from the state general tax will not go directly to local governments (i.e. counties, cities, school districts, etc.) even though it will be collected with other property taxes.

Instead, money raised by the tax will be deposited in the state general fund. Beginning in 2004, the money raised beyond the 2004 tax amount will be deposited in an education reserve account. This is the money that was earmarked under the original law for funding education aid or higher education. The state legislature will decide specifically how this money will be spent.

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How To Read Your Proposed Property Tax For 2013

Between November 10th and November 24th, look for your Truth-in-Taxation notice in the mail. (Renters: your landlord must post a notice for all tenants to see). The required T-N-T meeting times for your local jurisdictions will be shown on the notice.

A sample truth-in-taxation statement appears on the next page. Here is what you need to know:

* It is sent to all property owners, even if their property taxes are remitted by their mortgage company.

* There will be a separate notice for each piece of property you own.

* Owners of Mobile Homes will not receive a notice since their property is assessed and taxed in the same year.

* It must be mailed to you in a separate mailing without any other material or notices.

* It shows county and city or town proposed taxes that you would have to pay in 2013 if they are approved, and proposed school district taxes, which would also be paid in 2013.

* It includes a table comparing the amount of taxes you paid to your county, city or town, school district, and special taxing districts in 2012 to what you will have to pay in 2013 if proposed budgets are approved.

* Column (1) in the table will show the net property taxes you paid in 2012, excluding special assessments (levies for street repairs and other spending that is paid for by certain taxpayers who presumably benefit from the expenditures). Each jurisdiction is shown separately.

* Column (2) shows the proposed property tax bill for 2013 if the budget assumptions used for the notice are adopted.

* The date, time, and place of the required Truth-in-Taxation hearings are in the space below the two columns of proposed tax information. Counties, school districts, cities over 500 population are required to hold their hearings between November 25 through December 26, 2012 on their proposed total budgets (current school year budget in the case of school districts) and proposed property tax levies for the taxes payable year 2013. The meeting may be part of a taxing authorities regularly scheduled meeting but the meeting must be held after 6:00 p.m.

Note: Your truth-in-taxation notice is not a bill. It is just a notice of what will happen to your tax bill if spending plans are approved. Watch for your notice in November.

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Line 1 Use this amount on Form M1-PR to see if you're eligible for a property tax refund. The 2013 column is to contain the qualifying tax amount for use in claiming the property tax refund on the M-1PR form.

Line 2 Amount for the special property tax refund on Schedule 1 of Form M-1PR. This is your prior year qualifying tax.

Your property tax before reduction by state paid credits.

Line 4 Credit paid by the State of Minnesota to reduce your property tax. This is the new homestead and agricultural credit.A. Agricultural Market Value CreditsB. Other Credits

Line 5 Your property tax after reduction by state-paid credits.

Line 6 County Tax

Line 7 City or Township Tax

Line 8 State General Tax, the Department of Revenue certified the 2013 tax rates for taxes on commercial-industrial property at 52.523% and seasonal residential recreational (including cabins) property at 22.327%.

Line 9 School DistrictA. Voter Approved Levies, this line includes school district referendum tax on market value, operating purpose tax and bonded debt referendum tax on net tax capacity. Taxes approved by voted referendums for both operating purposes and/or debt. Fund numbers 32 - General - RMV Voter - JOBZ Exempt (Voted Operating Levies taxed on House, Garage and One Acre), 37 - General Debt - NTC Voter - JOBZ Non Exempt (Voted Debt on a Building taxed on Buildings and Land) and 40 - OPEB Debt - NTC Voter - JOBZ Nonexempt.

B. Other Local Levies, this line includes community service, general debt service and general other. Contact your school administration office for an explanation of what is all inclusive. Fund numbers 33 - General - RMV Other - JOBZ Exempt, 35 General - NTC Other - JOBZ Exempt, 36 - Community Service - NTC Other - JOBZ NonExempt, 39 - General Debt - NTC Other - JOBZ Nonexempt and 41 OPEB Debt - NTC Other - JOBZ Nonexempt

Line 10 Special Taxing DistrictsA. County Wide, Regional Library, HHRA, HEDA or Watershed District tax. (if applicable)B. County Wide, Regional Library, HHRA, HEDA or Watershed District tax. (if applicable)

Line 11 Non-school voter approved referenda levies. (There are no non-school voter approved referenda levies in McLeod County.)

Line 12 Total property tax before special assessments.

Line 13 Special assessments added to your property tax bill certified by the municipality in which the property is located.

Line 14 Your total property tax and special assessments.

NOTE: Tax Statements are sent to all property owners, even if their property taxes are remitted from an escrow account by their mortgage company.

How To Read Your Tax Statement

27

28

Final Final Final Percent2011 2012 2013 of Increase

TOWNSHIPS AND CITIESAcoma 232,000 238,000 238,000 0.00%

Bergen 265,000 235,000 200,000 -14.89%

Collins 95,000 100,000 103,000 3.00%

Glencoe Twp 65,000 75,000 75,000 0.00%

Hale 165,000 165,000 165,000 0.00%

Hassan Valley 143,000 143,000 150,000 4.90%

Helen 165,000 165,000 190,000 15.15%

Hutchinson Twp 131,500 145,443 125,000 -14.06%

Lynn 94,500 110,000 110,000 0.00%

Penn 89,000 89,000 96,500 8.43%

Rich Valley 62,000 67,433 71,480 6.00%

Round Grove 100,000 95,000 95,000 0.00%

Sumter 95,000 95,000 95,000 0.00%

Winsted Twp 193,000 208,000 207,000 -0.48%

Biscay 16,628 17,126 17,640 3.00%

Brownton 351,882 387,917 387,917 0.00%

Glencoe 2,108,500 2,282,894 2,275,942 -0.30%

Hutchinson 6,360,187 6,454,224 6,454,224 0.00%

Lester Prairie 642,197 608,954 640,197 5.13%

Plato 171,000 185,800 197,990 6.56%

Silver Lake 481,137 490,136 481,973 -1.67%

Stewart 370,134 370,134 375,686 1.50%

Winsted 1,117,629 1,117,629 1,103,432 0.00%

SCHOOL DISTRICTS#423-Hutchinson 2,580,254 2,456,380 2,480,459 0.98%

#424-Lester Prairie 319,702 193,743 362,708 87.21%

#2159-Buffalo Lake Hector 572,168 567,448 582,435 2.64%

#2365-Gibbon-Fairfax-Winthrop 1,221,364 1,241,109 1,088,276 -12.31%

#2687-Howard Lake-Waverly-Winsted 2,423,629 2,560,716 2,569,559 0.35%

#2859-Glencoe Silver Lake 954,585 912,525 989,887 8.48%

COUNTYRevenue 9,127,032 9,627,032 9,627,032 0.00%

Road & Bridge 3,332,097 3,262,097 3,262,097 0.00%

Human Services 4,245,901 3,809,343 3,807,076 -0.06%

Trailblazer Transit 0 407,600 409,867 0.56%

Debt Service 285,815 0 0 0.00%

Pioneerland Library 187,513 187,513 187,513 0.00%

Capital Projects 0 1,000,000 1,000,000 0.00%

Capital Equipment Notes 1,115,227 0 0 0.00%

Total County 18,293,585 18,293,585 18,293,585 0.00%

SPECIAL DISTRICTSRegion 6E 72,721 71,669 69,766 -2.66%

Buffalo Creek Watershed 57,827 57,453 68,770 19.70%

Hutchinson HRA 130,000 140,000 150,000 7.14%

Hutchinson EDA 159,985 154,174 150,218 -2.57%

High Island Watershed 21,255 29,786 29,160 -2.10%

Grand Total NT Levy 40,321,369 40,524,278 40,690,804 0.41%

Taxing Entities Net Tax Capacity Levies

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Final Final Final Percent2011 2012 2013 of Increase

MARKET VALUE LEVY#0423-Hutchinson 2,514,017 2,377,473 2,320,003 -2.42%

#0424-Lester Prairie 498,911 453,602 450,977 -0.58%

#2159-Buffalo Lake Hector 486,520 554,713 430,604 -22.37%

#2365-Gibbon-Fairfax-Winthrop 365,484 719,129 695,930 -3.23%

#2687-Howard Lake-Waverly-Winsted 949,127 847,044 810,247 -4.34%

#2859-Glencoe Silver Lake 1,392,945 1,502,062 1,333,776 -11.20%

Grand Total MV Levy 6,207,004 6,454,023 6,041,537 -6.39%

1,920,98011,935,00114,114,861

467,9143,207,285

18,293,585

49,939,626$

Taxing Entities Market Value Levies

All Taxing Authorities in McLeod County

County

TownshipsCities

Special DistrictsState General Tax

Schools

Townships

Cities

Schools

Special Districts

State General Tax

County

Where Do Your Property Tax Dollars Go?

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Actual Actual Actual Actual2010 2011 2012 2013

Revenue 9,686,526 9,127,032 9,627,032 9,627,032

Road & Bridge 3,332,097 3,332,097 3,262,097 3,262,097

Human Services 4,245,901 4,245,901 3,809,343 3,807,076

Trailblazer Transit 0 0 407,600 409,867

Debt Service 286,017 285,815 0 0

Pioneerland Library 187,513 187,513 187,513 187,513

Capital Projects 0 0 1,000,000 1,000,000

Capital Equipment Notes 1,107,818 1,115,227 0 0

Total 18,845,872 18,293,585 18,293,585 18,293,585

Percent of Increaseor Decrease over 2.9% -2.9% 0.0% 0.0%Previous Year

Fund

Four Year Comparison of McLeod County's Gross Tax Levy

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Levies are impacted by: Tax Bases are impacted by: Tax Rates are impated by:

* Number and scope of taxing * Exemptions (47 categories) * Disparity Reduction Aid (1)authorities * Exclusions (6) * Special service areas State (1) * Special valuations and Counties (87) deferments (4) Cities (854) * Tax base definitions (6) and Townships (1,802) classifications (55 incl. tiers) Special Taxing Districts (242+) TIF Districts (2,600)

* Service demands and mandates

* Property Tax Aids (10)and other Revenues

Parcel Taxes are impacted by:

* Credits (11)* Senior Deferral Program (1)* Refunds (4)

Levies are impacted by: Tax Bases are impacted by: Tax Rates are impated by:

* Number and scope of taxing * Exemptions (47 categories) * Disparity Reduction Aid (1)authorities * Exclusions (6) * Special service areas State (1) * Special valuations and Counties (1) deferments (4) Cities (9) * Tax base definitions (6) and Townships (14) classifications (55 incl. tiers) Special Taxing Districts (5) TIF Districts (11)

* Service demands and mandates

* Property Tax Aids (6)and other Revenues

Parcel Taxes are impacted by:

* Credits (11)* Senior Deferral Program (1)* Refunds (4)

* State-imposed levy limitations

Minnesota Property Tax System

For Governments in Minnesota: Property Tax Levy ÷ Tax Base = Tax Rate

For Taxpayers: Parcel Tax Base X Tax Rate = Parcel Tax Bill

* State-imposed levy limitations

For Governments in McLeod County: Property Tax Levy ÷ Tax Base = Tax Rate

For Taxpayers: Parcel Tax Base X Tax Rate = Parcel Tax Bill

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Tax GlossaryABATEMENT - A reduction or decrease in taxable value that results in a reduction of taxes after and assessment and levy.

ACRE - A measure of land, equal to 160 square rods (43,560 square feet) in any shape.

AD VALOREM TAX - Tax are determined based on the value of a property.

ASSESSMENT YEAR - The year as of which the assessments are based. The valuation and classification of a property is based upon it's status on January 2, for taxes payable in the following year for Real Estate and Personal Property. Taxes payable on Manufactured Homes are based on the assessment on January 2, of the payable year.

BUDGET YEAR - Same as payable year except for school districts. School districts budget using a fiscal year that begins July 1st. The tax levied by a school district in 2011 for taxes payable in 2012 is for the 2012/2013 school year.

CLASS RATE - The percentage by which a property's market value is multiplied to arrive at its "net tax capacity" or taxable value, subject to the local tax rate. Classification, with its set of class rates, redefines the tax base and results in a redistribution of taxes among different kinds of properties.

CLASSIFICATION OF PROPERTY - Identifies the type of property, such as residential, agricultural, commercial, etc. based upon the use of the property.

DEBT SERVICE FUNDS - A fund to account for the collection of resources and payment of long-term debt principal and interest.

DISPARITY REDUCTION AID - A general purpose aid program designed to assist in the equalization of local tax rates.

ECONOMIC DEVELOPMENT - Expenditures related to providing financed and operated in a manner similar to private business, e.g., hospitals and nursing homes. The expenses of providing services are primarily financed by user charges.

EDUCATION AID - The total amount of state dollars paid for K-12 education. This aid is paid to the school districts.

EDUCATION HOMESTEAD CREDIT - A state-paid credit to reduce the school districts tax paid by homestead. First available for taxes payable in 1998. Repealed in the 2001 tax bill.

ESTIMATED MARKET VALUE (EMV) - Represents the assessor's estimate of the property's actual market value. Market value is defined as the most probable price that a well-informed buyer would pay a well-informed seller for a property without either party being unduly forced to buy or sell. All properties must be physically inspected in person at least once every four years.

FISCAL DISPARITY - Program (M.S. 473F) which provides for tax base sharing within the seven county metro area. Each municipality contributes 40% of the growth of its commercial/industrial tax base since 1971 to the seven county pool. This pool is then redistributed based on relative fiscal capacity. A percentage of the property tax on each commercial/industrial parcel is based on the seven county area wide rate.

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GENERAL FUND - (also known as the Revenue Fund) -The fund used to account for all financial resources not required to be accounted for in another fund. This fund is the main operating fund.

GREEN ACRES - A real estate parcel of a least 10 acres, the owner of which is engaged in agricultural pursuits and otherwise qualifies for a deferment of assessment and taxes payable; intended to preserve farmland from the pressures of development.

HOMESTEAD - For property tax purposes, homestead is a tax benefit granted to property owners (or qualifying relatives) who are Minnesota residents and who own and occupy their homes as their primary place of residence.

HOMESTEAD AND AGRICULTURAL CREDIT AID (HACA) - A state program that replaces the former homestead credit programs and the agricultural credit program starting in 1990. It is a property tax relief program determined by formula and paid to local governments before taxes are levied. Effective for payable in 2002 and future years HACA was eliminated for cities, townships, school districts, and special taxing districts.

HUMAN SERVICES - Human services expenditures are designed to provide public assistance and institutional care for individuals economically unable to provide for their own essential needs.

LEVY - The amount of money that a taxing district needs to raise through property taxes.

LEVY LIMITS - State-imposed limits on the dollar amounts that can be levied by counties and cities and townships over 2,500 population.

LEVYING UNITS - In Minnesota, property taxes are levied by counties, cities, townships, school districts and special districts, which may included metro government agencies, hospital boards, watershed districts, transit authorities, park boards, and housing and redevelopment authorities, etc.

LIBRARIES - Expenditures include the purchase of reference materials and books, reference services to patrons, cataloging of materials, and general administration of the library.

LOCAL GOVERNMENT AID (LGA) - Money (in the form of general distribution aid) provided to cities and townships for property tax relief. Effective payable year 2002 and future years townships and small cities lost their LGA.

LOCAL TAX RATE - The tax rate usually expressed as a percentage of tax capacity, used to determine the property tax due on a piece of property.

MARKET VALUE REFERENDA RATE - Rate applied to the taxable market value of a property to calculate the market value referenda tax, for certain referendum levies which are based on market value instead of tax capacity.

NET PROPERTY TAX - As opposed to "gross property tax" - property tax after accounting for state aids and tax credits.

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NET TAX LEVY - The property taxes, net of state property tax relief aids or grants, required to be paid by the property owners of the county.

PAYABLE YEAR - Year in which tax statements are issued and taxes become payable on May 15 and October 15 for real estate. Agricultural property has until November 15.

PROPERTY TAX - Generally a tax levied on both real and personal property; the amount of the tax is dependent on the value of the property.

PROPERTY TAX REFUND - A partial property tax refund program for those who have property taxes out of proportion with their income. This program is available to homeowners and renters.

ROAD AND BRIDGE - Streets and highways current expenditures are for the maintenance and repair of local highways, street, bridges, and street equipment. Common expenditures include patching, seal coating, and snow removal. Streets and highways expenditures cover expenditures on all county highways, including county state aid highways. Streets and highways capital outlays include construction and equipment purchases.

SPECIAL ASSESSMENT - An amount for improvements (such as streets, etc.) as certified by each municipality, which directly benefit the property are shown as a separate item on the tax statement. A levy made against certain properties to defray all or part of the costs of a specific improvement, such as new sewer and water mains, deemed to benefit primarily those properties.

STATE AIDS - Aid given to a local unit of government to be used only for a specific purpose. The state contends that individual taxes would be higher than shown on tax statements if it were not for the CPA, LGA, and DRA. The presumed amount of aid is indicated for each parcel on line 4 of your property tax statement.

TAX BASE - Total value of taxable property within the community.

TAX CAPACITY - A parcel's taxable market value multiplied by the class rate for that type of property. Formerly known as assessed value.

TAX INCREMENT FINANCING (TIF) - Districts created by municipalities to create fund improvements which increase market values of the properties in the district. The taxes generated by the increased market value are "captured" by the TIF District to finance project development or redevelopment costs.

TAX RATE (INITIAL) - The percent of the total taxable value of property needed to achieve the dollar amounts levied by the respective local units (levy/tax capacity = tax rate).

TAX RATE (LOCAL) - Rate applied to the tax capacity of a property to calculate the tax. Formerly known as mill rate.

TAX RATE TOTAL - The rate arrived at by summing the tax rates of all the units in the area authorized to levy taxes on a particular parcel of property.

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TAXABLE TAX CAPACITY - The tax capacity less the tax increment district value, less the fiscal disparities contribution value, plus the fiscal disparities distribution value.

THIS OLD HOUSE - An exemption from property tax for all or a portion of the value of improvements made to homes at least 45 years old, designed to provide owners of older and deteriorated homes with an incentive to restore or renovate their house.

TOWNSHIP - A territorial division of land established by federal survey that is six miles square and contains thirty-six sections, each one mile square.

TRUTH-IN-TAXATION - State law providing for notices of proposed taxes for the up coming year to taxpayers and for public budget hearings.

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APPENDIXResources

Minnesota Taxpayers Association - Understanding Your Property Taxes "2012 Edition"Minnesota Taxpayers Association85 Seventh Place East, Suite 250

St. Paul, MN 55101Phone No. 651-224-747 or 800-322-8297

Website: http://www.mntax.org

Minnesota Department of RevenueMinnesota Department of Revenue

Property Tax DivisionMail Station 3340

St. Paul, MN 55146-3340Website: http://www.taxes.state.mn.us

University of Minnesota Extension ServicesWebsite: http://www.extension.umn.edu

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