Property taxes likely to rise in Scott, Dakota counties

Officials stress that the hikes would be to cover gaps as a result of the state budget crisis.

Property tax bills will be going up across the south metro.

That’s the early view in both Scott and Dakota counties, where board members are weighing their tax levy plans against millions in lost state aid and property values that have continued to fall.

“We’re definitely going to try to hold it as low as possible,” said Joe Harris, chairman of the Dakota County Board.

But even a flat levy — collecting the same $129.4 million as the county did in 2011 — will equate to a $20 bump in the county portion of the tax bill for the average Dakota County homeowner with property valued at $200,800.

Scott County homeowners will see a bump of closer to $70 on an average-valued property, said County Administrator Gary Shelton . They are less cushioned than those in Dakota, where the commercial and industrial tax base — notably the Burnsville Center area and Eagan’s corporate giants — is considerably larger.

But only about $10 of that stems from any increase in the county’s own levy, he added. “Most of it is driven by other factors,” including lost state aid and declining property-base sharing within the metro area, known as fiscal disparities.

Dakota commissioners reviewed the situation last week. Scott’s board is to get updated numbers from its senior managers on Tuesday.

Both counties’ tax bases declined in recent years as home values plummeted. This year there’s an added challenge: As state legislators balanced the state budget by axing state aid that covered a portion of the local property tax each year, they also ordered a drop in many residential property values for tax purposes.

All told, Dakota County’s 2012 tax base will be $30 million dollars less than it was in 2011. To collect the same amount of money, the tax rate would rise by nearly 7 percent.

“They have very directly put the burden of the state budget problems on the backs of the property tax payers,” said Dakota County Commissioner Kathleen Gaylord , bristling at the notion that tax bills will rise even if the county keeps its budget in check.

“We have been very frugal with our tax dollars. It’s just not going to happen that we’re going to make another huge set of cuts,” Gaylord said.

The county has sliced its operating budget by about 10 percent since 2009 and trimmed more than 100 staff positions through attrition and an early retirement offer.

Scott also has launched an early-retirement initiative. Since 2009 it has trimmed the equivalent of 48 full-time positions, Shelton said.

“We dropped from about 705 to about 657, while Dakota County must have had 1,800 people [before its cuts], so percentage-wise we have cut a lot of positions,’’ he added. “And that’s just 'to-date.’ By the time we’re into 2012 it will be a lower number.”

The likely hike in Scott’s levy will be a shade under 1 percent, or about $550,000, Shelton said, but county total spending is likely to decline; the hike is all about covering gaps.

Final levy decisions don’t have to be made until next month, but in both counties the macro-level decisions have been shaping up through the summer.

Dakota County Administrator Brandt Richardson  said he would recommend a flat levy when the board has to set the 2012 maximum next month.

“We’re about as lean as we can be right now,” he said. “The next alternative would be to start library closings and service center closings for certain days per week.”

Katie Humphrey • 952-882-9056
David Peterson • 952-882-9023

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