Taxpayers in Hennepin, Ramsey counties can brace for a rate hike next year

Taxpayers in Hennepin and Ramsey counties can prepare in November to see an increase on next year's tax bills.

Both counties' leaders got a look Tuesday at proposed 2017 budgets and what they'll mean for taxpayers in Minnesota's most populous counties: a bump in property taxes.

In Ramsey County, it's off year of a two-year budget-setting cycle, and Tuesday's board action was merely to reaffirm a 2.8-percent annual levy increase, which amounts to $8.5 million, officials said.

In Hennepin County, the board on Tuesday approved a maximum property tax levy of $759.4 million — that's a $32.6 million, or 4.5 percent increase, from this year's levy. That's to help fund a proposed 2017 budget of $1.9 billion — a budget second only in size to the state's.

"I do believe that this is too high," Commissioner Jeff Johnson said before casting the only vote against setting the maximum tax levy. "There are areas where we are spending where we don't need to be or shouldn't be."

The budgets are coming up now because the counties are required by state law to adopt a maximum property tax levy in September. Between now and final approval this winter, county leaders will host public hearings and may end up approving a smaller tax levy — they just can't increase it. By November, property owners will get a notice about how the levy will affect them.

In past years, the final tax levy in Hennepin County has often gone down from the maximum levy, though it's not always substantially below it, said David Lawless, the county's director of budget and finance. If next year's tax levy remains at the 4.5 percent maximum, the owner of a median suburban home of $256,000 would see a $10 bump in their tax bill to the county.

While the tax levy is going up, the county's proposed 2017 budget is actually going down 2.6 percent. That's because a bulk of the budget involves Hennepin Health, the county's care program, which expects a $97 million decrease and isn't funded by property taxes.

Without Hennepin Health, the county's budget would actually be going up $47 million, Lawless said. A big part of that is due to a proposed 3 percent increase in employees — equal to 242 full-time workers — to meet rising caseloads in child protection, probation and other services. Jan Callison, chairwoman of the board, said the staffing increase is "unfortunately high," driven by mandates passed on to the county and by higher caseloads.

"This is, I think, the right place to start the conversation," Callison said of the tax levy. "It's always difficult to know whether we should set the max levy a little bit higher thinking we're going to come down or set it where we think that we're going to end up."

A truth-in-taxation public meeting will be held at 6 p.m. Nov. 29 at the Government Center. The final vote will take place at 1:30 p.m. Dec. 13.

Ramsey's 5.8 percent population growth from 2009 to 2015 makes it the fourth-fastest growing county in the state after a period of decline and stagnation, Julie Kleinschmidt, county manager, told commissioners last month.

Kelly Smith • 612-673-4141