Tax valuations fall, but some bills will rise

Hennepin County homeowners could find both good news and bad in analyzing their proposed property tax bills for 2010.

In about half the Hennepin County cities of 5,000 or more population, owners of the typical home will see their tax bite going down. But generally, that's because their property's assessed value has declined.

Then there are the doubly unfortunate: Homeowners whose property values dropped, but whose taxes still are rising. That's true in the most of other localities. For example, in Orono, property values for the median home were off about 1.5 percent, but some homeowners' taxes could be going up as much as 5 percent.

The only city that saw its median home value increase was Edina. But its tax increase was also the biggest: The owner of a median-valued home in the city could be paying up to $358 more in taxes next year, depending upon what school district he lives in.

Taxpayers soon will get their crack at commenting on city and county budgets and property tax levies when public tax hearings begin in December.

Homeowners received letters last spring informing them of their property's assessed value, and recently they received their proposed 2010 tax bills to go along with those property values.

Property taxes on the median-valued home are proposed to go up in Bloomington, Eden Prairie, Edina, Golden Valley, Hopkins, Maple Grove, Minnetonka, Orono, Shorewood and St. Louis Park, according to a city-by-city comparison compiled by the county.

Cities where taxes are proposed to go down include Brooklyn Center, Brooklyn Park, Champlin, Corcoran, Crystal, Minnetrista and Robbinsdale, Rogers and St. Anthony. All are cities where the median home value also has dropped.

The dip in taxes in Crystal "is not something we can take credit for,'' said Charles Hansen, Crystal finance director. "Market values within the city ... have fallen a little bit faster than they have in the rest of Hennepin County. The taxes follow that.''

Crystal, where the median-priced home declined nearly 8 percent in value during the preceding year, is showing an overall tax drop of 3.45 percent, even though the city plans to raise its levy by 11 percent to make up for state aid the city lost when Gov. Tim Pawlenty balanced the state budget, Hansen said.

In every city in the county except Edina, median market values went down by at least 1 percent, according to the county comparison. Brooklyn Center showed the largest decline, with a 13 percent drop in median market value from 2008.

"It's a reflection of the real estate market. Residential real estate has tipped down,'' said Hennepin County assessor Jim Atchison. "We value every parcel in the county every year. We compare what properties have sold for. We are looking at actual sales. We try to follow the market.''

Each homeowner's taxes depend upon property value, the city levy, the school district levy and the county levy.

Edina is No. 1

Edina has a proposed tax increase of 7.86 percent in parts of the city that are in the Hopkins School District and 5.68 percent in parts of the city in the Edina School District. They are the highest proposed increases in the county. Even so, some Edina residents whose homes have lost value will pay lower taxes.

Edina Finance Director John Wallin said the city is proposing a 5.5 percent levy increase -- 2.2 percent to make up for lost state aid and 3.3 percent to pay the debt on the city's new public works facility. A 2010 city wage freeze is included in the budget, Wallin said.

Brooklyn Park cut nine positions and the administrative staff is recommending freezing wages next year to deliver a zero increase in taxes for people whose property values have stayed the same or gone down, said city Finance Director Cory Kampf. Foreclosures in Brooklyn Park have caused the median property value decline, said City Assessor Marvin Anderson.

In Corcoran, many people will see tax reductions, even though the city proposes to raise its levy by about $41,000 because median property values have dropped by about 8 percent, said City Administrator Dan Donahue.

Hennepin County's hearing is scheduled for 6 p.m. Thursday at the county government center in downtown Minneapolis.

Carver County

In Carver County, market values for median-priced homes have decreased in every city, but there will be some property tax increases to close funding gaps next year.

In Waconia, for example, median assessed values have dropped by 2.7 percent for 2010, but city residents face a proposed property tax increase of about 2 percent on a median-valued home. The preliminary increase had been proposed at 4.5 percent in September, but "that's come down quite a bit," said City Administrator Susan Arntz. The city is reducing some services to keep the rate from going up that much, she said.

One exception to the increases is Victoria, where median market values are decreasing by 3.1 percent and property taxes are scheduled to drop next year, anywhere from $34 to $92 for the median-valued home, depending on which school district a resident lives in.

Then there is Watertown, where median assessed values are showing the biggest drop in the county -- almost 10 percent. The proposed property tax bill for 2010 for the median-valued home is expected to go down only about 1 percent, or roughly $20.

Laurie Blake • 612-673-1711