Ramsey County commissioners are bracing for anticipated outrage this fall, as residents of some of the county’s poorest neighborhoods learn of major tax hikes because of property values that are finally rising big time postrecession.
“When some people open their [tax statements] there will be almost crying at our public hearing,” said Commissioner Jim McDonough. “It will be, ‘How did this happen?’ ”
Before they launch into formal discussions this fall on the budget, commissioners were confronted Tuesday with a sobering look at what the proposed bump in spending and taxes will mean across the county.
The proposed two-year budget through 2019 calls for a hike in the property tax levy of 4.3 percent each year, amounting to increases of $12.7 million in 2018 and $13.3 million in 2019.
The tax impact will vary according to locality and property type, with the value of apartment buildings up strongly. But across the metro area, buyers in quest of affordable homes are driving up prices in less-affluent areas.
McDonough pointed to St. Paul’s North End, where he said taxes likely will rise even though monthly income hasn’t changed one bit. “Folks there are seeing an 18 percent annual increase in value that translates to a 15.8 percent increase in taxes payable,” he said. “That’s a tough one. I know there’s no response.”
Added Commissioner Janice Rettman, who represents the North End and adjacent areas: “Ka-ching, ka-ching. Sticker shock. Many of my constituents are working dang hard at minimum-wage jobs and there are no extra hours in the day to make it up.”
Broadly speaking, and based on changes in value, the tax burden will shift from suburbs to St. Paul, analysts said. Market values are up in all areas of St. Paul, officials said, but some areas will still see drops in taxes if the proposed budget is approved.
Notable jumps in value are projected for St. Paul neighborhoods such as Thomas-Dale and West Seventh.
Shoreview also is reckoned to be seeing a surge in value, though broadly speaking single-family homes have yet to attain the heights they reached before the 2008-09 recession.
Among single-family homes, said Chris Samuel of the auditor’s office, “the vast majority of increases will be less than 10 percent, many much less. But a significant number are in the 10 to 20 percent range and we would expect to hear from the owner[s] of those properties.”
County Manager Julie Kleinschmidt said the increases are needed in part because federal and state support is dropping.
At the same time, she said, senior staffers are seeking new and expanded initiatives such as diverting people with mental health problems out of the criminal system, creating permanent housing for long-term homeless shelter users, upgrading security at the jail and replacing the sheriff’s radio system.
“I’m excited by the fact that while mental health is often criminalized, we propose to interrupt that,” she said.
Key public hearings will be held on Sept. 12 and Nov. 27 as the debate over proposed programs and the budget plays out.