Hennepin County may raise property taxes nearly 5%

Hennepin County is proposing to raise property taxes next year by as much as 4.95 percent, mostly to help cover an anticipated rise in the number of uninsured people needing help at the county hospital and the loss of the state's health care program for poor adults.

"As the economy goes bad and people are unemployed, they might be able to carry insurance for a while, but then it goes away. So there's potential here for a significant increase" in the county's medical expenses, County Administrator Richard Johnson said.

Commissioners will decide Tuesday whether to accept or tweak Johnson's recommended levy ceiling for the proposed 2010 budget, which he will present to the board later this month. The budget is expected to total about $1.7 billion.

The levy would cover only part of the millions in increased costs that Johnson foresees for 2010. The balance would be made up with cuts in spending and jobs, he said.

Johnson's proposed maximum levy would result in $676.2 million in property taxes for 2010, compared with $644.3 million this year.

He also is recommending $15 million for the county's burgeoning rail projects -- an increase of $8 million over this year -- and $3.6 million for the county housing and redevelopment authority, a hike of nearly 200 percent to pay now for an affordable housing fund rather than continue to support it with bonded debt.

Under a levy increase of 4.95 percent, a Minneapolis taxpayer with a home at the median market value of $190,600 would pay 4.1 percent more than this year, or $30. A homeowner in suburban Hennepin County with a home valued at the market median of $252,800 would owe 0.4 percent less, amounting to a savings of $4 next year.

Three percent of the levy increase would help cover expected increases in uncompensated care at Hennepin County Medical Center. That risk grew when Gov. Tim Pawlenty vetoed in May the state-funded general assistance medical care (GAMC) program, used by 32,000 uninsured low-income adults. Unless lawmakers act in next year's session, GAMC will end April 1.

The remaining 1.95 percent increase that Johnson recommended in the levy ceiling would give the county some wiggle room in the event of another dismal state fiscal forecast this fall and the loss of more state aid through another round of unallotments by Pawlenty.

Johnson said there was one nugget of good news: the county's annual solid waste management fee, which brought in $16.1 million this year, can be canceled next year. Debt service on the downtown garbage burner is nearly over, and two waste facilities the county supported in Elk River and Burnsville are closing.