Tax picture: Dakota down, Scott up

  • Article by: DAVID PETERSON , Star Tribune
  • Updated: September 17, 2013 - 3:51 PM

At least that’s the simplest bottom line. In reality, it’s a bit more complex.

Dakota County is cutting taxes for next year. Scott County has left itself the option of raising them.

It’s probably no coincidence that Scott commissioners and managers were a bit defensive about it, while folks in Dakota were beaming.

“It’s a much more fun story to tell when taxes are going down,” said Dakota County’s deputy administrator, Matt Smith.

Strictly speaking, depending on what happens to the value of a person’s home, taxes could rise, fall or stay the same in either county. Overall, though, the bottom line is this:

• Dakota for the second year in a row will cut its total property tax levy. After slicing it just a smidgen, by 0.2 percent, last year, the board saw to it a few days ago that the levy will come down by at least $650,000, or half a percent, next year.

• Scott expresses its bottom line in two different ways, but both represent upticks: In rough terms, either $600,000 or $450,000 up, which represents an increase of either 1.06 percent or .87 percent.

Dakota officials freely give the credit — or a lot of it — to a DFL-dominated Legislature that was comparatively generous with local governments.

Lawmakers dished out more state aid and exempted local units of government from some sales taxes, Smith said, enabling the county to more than offset what will likely be higher costs of running the government, once final spending decisions are made this fall.

Scott officials stressed that their tax rate — the percentage of your property’s value surrendered to the authorities — will go down 1 percent, owing in part to an increased tax base through new construction.

About 16 percent of homeowners, those whose values rebounded most smartly from the recession, will see tax bites rising more than $20, commissioners heard from Kevin Ellsworth, chief financial officer. Another 38 percent will see a bump up, but smaller than that, while 46 percent will see a decline.

Scott’s demands on the spending side are varied, Ellsworth said, including a 15-percent bump in health-insurance costs that will settle down to 3 percent thereafter, and the desire to restore the county’s bank account and thus improve its bond rating.

Citizens are getting a lot for the money, he said, including the largest number of highway projects in the past three years and a new emphasis on economic development that has cost money but has helped yield results in Shakopee adding several major new employers.

The decisions this month are strictly preliminary, which commissioners stressed as they agreed to the tentative increase.

“People don’t realize it’s preliminary right now,” a cautionary move just in case, said commissioner Joe Wagner.

Commissioner Jon Ulrich praised senior staff for shaving dollars off of the board’s informal target.

“It’s obvious staff worked hard to make this as low a number as it could be,” he said. “The target was 1.3 percent, and you came in at 1.06.”

The county aims for average budget increases in the next several years of 2 percent a year, officials say, with tax hikes averaging 1.4 percent, covered primarily by new development.

Of course, the county’s share is just one portion of the overall property-tax bill. School districts, cities and townships also are figuring out what they will need for the year.

In Dakota, the impact on a median-value home — worth $192,400, up from $188,000 last year — will be a decrease of $9.10 or 1.6 percent, down to $551.31, Dakota officials calculate.

“This is the first year for quite some time now that we’ve seen home values in general going back up,” Smith said, “so for our median value home, two things happen: value up, tax bill lower.”

 

David Peterson • 952-746-3285

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