If property values are falling across much of Minneapolis, why are so many owners getting walloped in their tax bills -- with some increases of more than 20 percent?
Melissa Paulson is among those feeling the sting. She lives in the Standish neighborhood, not far from Lake Hiawatha. Her home's value held steady, but her proposed tax bill jumped by 17.9 percent. In low-key but heartfelt testimony last week, she asked the City Council to remember people like her who have lost jobs when it decides how much to spend next year.
The paradox of falling or stagnant values and rising taxes is complicated but happens because some properties hold their value better than others.
The proposed bills sent to city residents like Paulson also include taxes for other governmental bodies, including Hennepin County and the Minneapolis school district. But the city levy is the largest share of those bills.
Earlier this year, a city board set the maximum increase in total property tax collections for 2011 at 7.5 percent, although Mayor R.T. Rybak said he hopes to hold that to 6.5 percent. Both figures are actually less than most increases since Rybak took office, but a combination of circumstances is piling more of the burden on homeowners, especially on the South Side.
Last year, every major property category in the city plummeted in value faster than residential property. So even though residential values dropped 4.2 percent overall, homeowners will shoulder 56 percent of the city's 2011 tax burden, compared with 54 percent this year.
The burden would be less if the city slashed spending, but draconian steps such as limiting operations to essential services such as public safety and streets have yet to be seriously discussed at City Hall. Officials say the city has trimmed the number of workers and maintain that it is spending less than 10 years ago, when inflation is factored in.
Location, location