Twin Cities metro counties propose 2015 property tax collections

Hennepin, Washington and Scott counties moved Tuesday toward bumping up their property tax collections next year, while Ramsey County plans to hold steady for the second consecutive year.

Hennepin County Administrator David Hough proposed collecting just shy of $700 million next year, an increase of $18.7 million over 2014. In Ramsey County, the board agreed not to increase the amount levied, capping collections at $276.6 million.

The state's two most populous counties credited good fiscal management for their budgets. In Hennepin, Hough said the county's sound management is responsible for holding the rating from the New York bond houses at AAA for the past 30 years; Ramsey County also enjoys AAA ratings from Standard & Poor's and Moody's. A high rating is like a good credit score, allowing the county to borrow money at lower interest rates.

When setting property tax levels for the coming year, county officials tend to paint broad strokes, adopting maximum levies and leaving details to be discussed later. Most final budgets are approved in December.

Things have been moving in a better direction in recent years for counties, having endured a decade of state and federal aid reductions, property devaluations and a turbulent health care market.

In Hennepin, Hough touted the enrollment of 58,000 in MNsure, the state's health insurance marketplace. That chunk made up nearly half of the state's 40 percent reduction in the number of uninsured people.

The proposed $1.6 billion budget includes adding the equivalent of 120 full-time employees to the current 7,656. The new employees will be nurses, child protection workers, child support officers and case management aides, community corrections and adult probation workers.

He called the tax increase for Hennepin County homeowners "modest." The owner of a median-valued suburban home can expect an increase of about 4 percent, or $40 on the county portion of the bill. In Minneapolis, a median-valued homeowner can anticipate an increase of 2.4 percent, or $18.

In Ramsey County, Commissioner Victoria Reinhardt, who chairs the Budget Committee, attributed the county's fiscal discipline to its biennial budget process which she called "truthful, straightforward and transparent." The county plans its budget every two years, rather than year-to-year as with most counties.

The board followed the lead of County Manager Julie Kleinschmidt, who proposed the same tax collections next year, saying increases in state and federal funding cushioned the budget. It's the first time in more than 20 years that Ramsey County taxpayers will go two straight years without an increase in the county's property tax levy.

Ramsey's $613.4 million proposed budget for 2015 includes funding for expanding the Shoreview and White Bear Lake libraries, road improvements, pollution cleanup at the former Army ammunition plant site in Arden Hills, and operations at the newly acquired Vadnais Sports Center.

Even with the collections holding steady in Ramsey County, county property tax bills may still go up because homes have risen in value far more than commercial and industrial properties have.

In comparing the two counties, Hennepin County Finance Director Dave Lawless said the five-year average of property tax levy increases in Hennepin County, including 2015, is 0.79 percent compared with 1.25 percent for Ramsey.

In Washington County, commissioners on Tuesday gave preliminary approval to the first significant property tax collection increase since 2010. The proposed 3.49 percent increase resulted from wage hikes for county employees after years of salary freezes, said budget director Kevin Corbid. Health insurance costs for employees also contributed, rising by nearly 6 percent, he said.

The proposed net tax levy for 2015 would be $89.7 million, in addition to $88.2 million in non-levy revenues. Operating expenditures, at $152.1 million, would increase by 2.6 percent.

Scott County decided to collect no more than $58.72 million next year, an increase of 1.9 percent over 2014. The county has raised collections every year for the past decade. Commissioner Joe Wagner said the board is likely to increase property tax collections by an average of $15 per household.

"You do it every year, it starts building up," Wagner said.