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Gov. Mark Dayton and Revenue Commissioner Myron Franz announced in July that Minnesota property taxes would go down 1.5% or $121 million from local government aid and property tax refunds,

Glen Stubbe, Star Tribune

Property taxes are on the decline again in metro

  • Article by: Anthony Lonetree
  • Star Tribune
  • December 7, 2013 - 11:48 PM

 

The typical homeowner in a majority of Twin Cities-area communities can expect a savings in property taxes next year, projections show.

Whether the savings is good enough, however, is a debate you’re likely to hear in next year’s political campaigns.

Reductions are widespread in Anoka, Ramsey and Scott counties. In Dakota County, where savings were promised in preliminary notices sent in November, voters in several communities since have opted to instead accept increases to invest more in their schools.

In Minneapolis, the owner of a median-valued home can expect a 0.73 percent tax reduction next year. In St. Paul, the projected savings is 6.2 percent, the tax-bill calculations show.

Overall, the outlook for 2014 property taxes is not as favorable as it was a year ago.

The property tax — arriving as it does in the mailbox — is the most visible tax that a citizen pays, said Hamline University professor and political analyst David Schultz.

As such, he said, those who see increases when they open their bills in March may wonder: What happened to the tax relief promised by Gov. Mark Dayton and state DFL leaders this year?

Schultz said that even if some of the resulting increases weren’t intended, “the other side is going to blame you no matter what.”

After statewide numbers released last month showed that local tax levies were going up instead of down, state Revenue Commissioner Myron Frans offered a hold-the-line message that included reminders that several tax provisions enacted this year — including more aid to local governments and schools, as well as the elimination of $129 million worth of sales taxes to cities and counties — were meant in part to provide tax relief to homeowners.

State Rep. Jenifer Loon, R-Eden Prairie, House deputy minority leader, said taxpayers in communities receiving significant state funding increases are likely to notice if levies don’t reflect that influx of new money.

But, she added, local governments still have until the end of the month to take final action. Until results are known in February, she said, it was too early to tell how big a campaign issue the property tax might be.

Loon noted that Eden Prairie, which gets no local government aid and has been weighing a 1.4 percent increase in its city levy, has a history of looking out for residents in tough times.

Market steadying

According to property-tax calculations provided to the Star Tribune, most homeowners would see decreases in 44 of 87 metro-area communities, compared with 18 in which increases have been projected. The remaining 25 cities show both increases and decreases, with differences depending on a homeowner’s school district.

A year ago, 54 communities had been on pace to deliver tax savings to the typical homeowner.

Projections do not take into account school levies approved by voters in November. In the South Washington County School District, for example, the approval of two ballot questions last month erased the projected savings for a median-valued home in Woodbury.

That development was detailed at the district’s annual tax hearing Thursday night, during which no one from the public spoke.

In Hennepin and Ramsey counties, home values are stabilizing, resulting in smaller shifts in tax burden from residential to commercial properties.

But the shifts still exist, and when combined with budget restraint made possible by increased state aid, they are generating savings in Ramsey County and “little change” overall to homeowners as a group in Hennepin County, county tax officials say.

In St. Paul, only two people showed up Wednesday for the city’s annual budget and levy hearing, and neither complained about taxes.

Still, Hamline’s Schultz said, voters can expect to hear from candidates about property taxes next year. One place where there may be debate: East Bethel, in Anoka County.

East Bethel residents will stomach a 15.1 percent increase in the city portion of their property tax bill (although the overall tax increase is more modest). In lieu of the city’s sluggish tax base, the higher taxes will pay interest on water and sewer bonds issued for a $48 million treatment system.

At the local level, the Shakopee and Mahtomedi school districts already are on record saying they’ll be making funding pitches in 2014. For Mahtomedi, the stakes are high. It was one of the few districts to see a levy proposal fail this year.

 

Staff writer Shannon Prather contributed to this story.

Anthony Lonetree • 651-925-5036

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