The City of Shakopee is required to comply with the statutory deadlines for submittal of the property tax levy to Scott County and must certify the levy before October 1, 2018.

The levy amount that will be certified to Scott County before October 1, 2018 is the base for budget work that will be brought back to the city council for continuing budget discussion in November.

The final levy, which cannot be higher than the preliminary levy, but can be lower, will be brought to the Council for review at the December 4, 2018 council meeting. This will also be the date that will serve as the Public Input meeting which provides the public opportunity to comment on the budget and levy. Final approval of the budget and levy needs to be approved by December 31, 2018 and is expected to occur at the December 18, 2018 council meeting.

Staff recommends the city council adopt the property tax levy as reviewed and discussed on September 4, 2018 council meeting. The preliminary 2019 levy represents a 0.15% decrease over the 2018 levy. This levy does not include the EDA special benefit levy, which is a separate levy requiring separate EDA and Council approval. 

Due to a decrease in the levy and new growth creating new tax capacity, an average valued home of $255,000 will see a tax decrease of about $62 or 7.2 percent, absent any change in valuation. Even factoring in an increase in value, an estimated 7,147 residential properties will receive a tax cut.

The average market value of homes in Shakopee increased by 5.3 percent from $242,100 to $255,000 for 2019. The estimated annual city tax impact for homes that increased in value from 0 to 5 percent will be a tax decrease of about $39 or about 4.5 percent. The proposed budget also decreases our current tax rate, lowering it from 37.971 percent to an estimated 35.231 percent.

Attached is the budget memo that was provided at the September 4, 2018 council meeting which provides specifics on the preliminary levy, valuation changes for residential properties and the levy impact for residents. Also attached is a graph illustrating the 2019 preliminary levies for our comparable cities.

Staff is also requesting the council approve a resolution canceling the debt service levies for specific debt issuances. These debt issuances have sufficient fund balances available to pay for future debt service payments without levying the entire required debt service levy.