Proposed 15% property tax hike in St. Paul draws ire

St. Paul city, county and schools officials heard a worst-case scenario for 2023 property taxes on Wednesday that would bring widespread increases plus harsher blows to homeowners in large parts of the city.

The owner of the city's $266,300 median-valued home could see the tax bill rise by $506, or 14.8%, under levy proposals and other factors in play.

The school district eased the pain somewhat by releasing a tax proposal Wednesday calling for a 0.9% reduction in its levy. But it made only a small dent in the sharp increase expected when Mayor Melvin Carter proposed in August a 15.34% increase in the city's share of the tax bill.

City Council members vowed to work to trim the hike after citizens began airing concerns at a hearing last week.

"We don't earn a lot of money. We struggle," said Patty Egger, a food service worker who has lived in the Como neighborhood for 40 years. "How am I going to afford my mortgage? How am I going to get through?"

St. Paul homeowners are able to get an early look at next year's potential tax bill because of a state law passed in the 1990s that created the joint city, county and schools committee.

Half of the city's levy hike is the result of a court ruling ordering St. Paul to stop assessing property owners for routine maintenance of streets that abut their property. Carter is proposing to shift most of those costs to the general fund. That means homeowners would see the city's share of the tax bill partly offset by a decrease in their street maintenance costs.

Areas that could be hit hardest because of value increases include Frogtown, Hamline-Midway and the East Side neighborhoods of Dayton's Bluff, Payne-Phalen, Sun Ray-Battle Creek-Highwood Hills and the Greater East Side.

Median-valued homes in the Payne-Phalen, Dayton's Bluff and Greater East Side areas would see property tax increases of about 20% if the city, county and school district approve their respective levy proposals in December.

Only one neighborhood — downtown — would see owners of median-valued residential property get a tax savings.

Corey Erickson, interim deputy assessor for Ramsey County, told the panel that St. Paul's residential properties also increased in value at a greater rate than did commercial properties, leaving homeowners to shoulder a greater share of the tax burden.

The school district relies on calculations and authorization by the Minnesota Department of Education to set its levy, which accounts for about 22% of its revenue. This year, the district's ability to raise operating funds is being hampered in part by declining enrollment. Also, it is seeing a drop in money needed for pensions and other benefits.

"We heard people ... saying they're hurting and they're struggling and trying to make ends meet, and we understand that," she said.

Council Member Jane Prince said: "For low-income homeowners and those on fixed incomes, these increases are simply not sustainable."

Karen Cox, a First Ward resident, was among those who addressed the council.

"All of us in this crowd, I'm sure, have had to cut our budgets, but I don't see any cutting on this list at all," she said. "Your citizens of St. Paul have got limits. And if you haven't noticed what the world is like, inflation is killing us. And this is going to destroy us."