The value of the average home in Dakota County has slipped by about $7,000, and that drop will begin to be reflected before long in property tax bills, the county board learned Tuesday.
But it's also a process that works in slow motion: Because so many protections are built into the system, the housing slump won't truly work its way into the household budget until next year. And it won't kick in big-time until the year after that, county assessor Bill Peterson told the county board in a briefing.
Still, it's something: In neighboring Scott County the average value on paper is still rising slightly.
Contrary to a "common misperception," Peterson said, the mere fact that property values decline won't mean that peoples' taxes also drop. "That's a later step."
Falling values, however, do require politicians to take tougher steps to keep bringing in tax dollars.
While rising values create an automatic tax cascade, with receipts sometimes rising even as elected officials cut the rate of taxation, today's market could require votes to raise tax rates just to cover inflationary increases.
In Dakota County, values fell in every city of any size. They sank fastest in the cities with the most affordable homes: remote Farmington and aging South St. Paul. Inver Grove Heights came closest to maintaining its value.
The impact on the county's budget will be cushioned by increases in the value of farms, and of such commercial properties as office buildings and stores. Both rose by 5 percent, on average, meaning the tax burden will shift toward those properties and away from homes.
Even so, though, Peterson suggested that commissioners brace for unhappy homeowners convinced that they are still overpaying taxes, given what they feel has happened to the value of their homes.
That will happen for a number of reasons, he said, including the fact that by law assessors must only take into account sales that took place within a 12-month period that ended last fall. "Those dates," he stressed, "are very important."
Values are thought to have fallen since then. But that decline won't begin to be reflected in tax calculations until this time next year. And it won't drive down the tax burden until a couple of years after the fact.
The city-by-city picture for Dakota County is vastly different from that of neighboring Scott County. Home values there changed across a wide range, from a nearly 11 percent dive in New Prague to an increase of nearly 9 percent in Jordan. Overall, they were flat -- up by just a sliver, less than 1 percent.
In Dakota, by contrast, cities were all bunched together. Most saw a decline in the value of an average home of about 2 percent. In an interview after the meeting, Peterson said he isn't sure what might account for that, other than that the growing presence of town homes in the county might be affecting overall averages.
The total taxable market value for the county is $43.5 billion, essentially equal to last year's figure.
David Peterson • 952-882-9023