In 1995, the Shakopee Housing and Redevelopment Authority (HRA) transferred its authority to the Shakopee EDA via Resolution No. 4206. This action allows the EDA to levy a separate tax or "Special Benefit Levy", which is not part of the city's general property tax levy. This EDA special benefit levy is subject to a limit of 0.0185 percent of the city's estimated market value. The EDA levy cap for 2019 is estimated to be $834,400.

Prior to 2018, annual transfers were made from the City's General Fund to the EDA to cover operational costs, façade loan funds and other development related activities. The EDA levy eliminates this transfer from the General Fund, thus reducing the city’s general levy and is considered a budget neutral change.

The advantage of the EDA special benefit levy is that the levy is applied to the market value of all taxable properties within the city including properties that are currently part of a tax abatement or TIF plan. The EDA levy is also identified on property tax statements as a separate local tax outside of the city's general property tax.

Staff is recommending an EDA special benefit levy of $350,000 for 2019, which is the same levy amount as 2018. A home valued at $255,000 for taxes payable 2019 would pay approximately $20 towards this EDA levy. A commercial property valued at $1.0 million would pay approximately $95.

State Statutes require the consent of the City Council, prior to the tax levy becoming effective. The EDA approved the levy and budget at their December 4, 2018 commission meeting.