Hennepin County homeowners' county taxes to dip

Saying that Hennepin County should give taxpayers a bigger break, county commissioners on Tuesday capped the county's maximum property tax levy increase for 2009 at 7 percent.

That's almost a full percentage point lower than the maximum suggested by county administrators, and will mean that most homeowners will see their county property taxes decrease.

How much wasn't clear on Tuesday, but earlier projections with the higher levy limit showed that county taxes would drop on Minneapolis homes valued up to at least $900,000 and on suburban homes valued up to at least $400,000.

The lower levy limit may also mean more county layoffs. County officials previously said federal and state budget cuts meant that $29 million had to be cut to balance the 2009 budget and had announced job cutbacks of about 220 full-time positions. The new, lower levy limit means $3 million to $4 million in additional reductions.

Commissioners who supported the lower limit said they were sure the state's richest county could find more places to cut a budget expected to exceed $1.6 billion next year.

'A little breathing room'

Commissioner Mike Opat said he was tired of the county endlessly filling financial holes left by state cuts. Every school district in the area he represents is seeking more tax support through referendums, he said.

But other commissioners said that with three months before the final budget is set and signs of growing economic stress nationwide, the board was limiting its options by dropping the maximum levy increase from the recommended 7.98 percent to 7 percent.

"I just can't support this without knowing the implications," said Gail Dorfman.

The lower limit passed on a 4-3 vote, with Opat, Linda Koblick, Penny Steele and Mark Stenglein voting yes and Dorfman, Randy Johnson and Peter McLaughlin casting no votes.

For the first time in decades, the overall market value of property in the county has dropped, especially on homes. Those declining home values mean that businesses will bear a bigger share of the property tax burden, a reversal of recent trends.

This year, for the first time, Hennepin County's housing and redevelopment authority got its own taxing authority. Previously, taxes for those needs were raised as part of the county's overall property tax. Koblick objected to that change. Though the new tax will raise just $1.3 million next year, she said she worried about future increases and objected to the new tax on principle because "new taxes hurt taxpayers." Her proposal to get rid of the new tax died on a 5-2 vote.

Final adoption of the 2009 budget and levy is scheduled for Dec. 16.

In other action, a board committee delayed a decision on adding a planetarium to the top of the new Minneapolis downtown library. Commissioners said they wanted more detail, and the matter is expected to come up in committee later this month or early in October.