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ST. PAUL, Minn. (10/19/2006) - Truth in Taxation season is approaching -- the time of year when local units of government send out notices and hold hearings about proposed property taxes for the following year.

That means it's time to pay attention to a measurement called net tax rate.

The best way to measure the total impact of property taxes in your community is through the net tax rate. The net tax rate is a ratio of annual property taxes to total property value across all taxing jurisdictions -- school districts, counties and townships.

For example, residential homestead owners in Becker County pay 0.8 percent of their property value in taxes each year. In this way, you can use the net tax rate to put your community's level of taxation in perspective.

The net tax rate of every county is accessible through a university website which analyzes actual sales prices submitted to the Minnesota Department of Revenue. The website, Minnesota Land Economics, can be accessed at http://www.cffm.umn.edu/landeconomics/landdata. To review information on a particular county, go to the website and click on "property taxes."

Even if your county keeps its rate increase at minimum, other taxing jurisdictions like schools and townships may not be as successful.

The university database allows visitors to analyze differences in net tax rates between taxing jurisdictions. Just choose "taxing unit" in the fourth step of selecting attributes.

You'll see that residential homestead properties in the same county but different townships or school districts will have a net tax rate different from residential homestead properties in other taxing jurisdictions. Some of the difference comes from each jurisdiction having a different tax levy, but each jurisdiction also has a different mix to their tax base.

For example, some jurisdictions rely heavily on residential homesteads to shoulder the tax burden since they have few commercial or industrial properties. Another reason for different net tax rates is that the legislature has mandated each property class be taxed differently.

The Minnesota Land Economics site is also a great place to get a snapshot of a particular county's tax base. Just run a report on property valuations instead of net tax rates to see which property uses are important to a specific county.

Ryan Pesch is a community economics educator with the University of Minnesota Extension Service.

http://www.extension.umn.edu/extensionnews/2005/nettaxrate.html