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Local governments are approving preliminary property tax levy increases this month, with Dakota County facing the steepest increase and Mendota Heights one of the lowest.
Timeline: State law requires a preliminary property tax levy increase to be approved by the end of September. The preliminary number is what residents will receive on their property tax statements in November. That number can be lowered—but not raised—before the final approval in December.
Feedback: Every community will host a public hearing before the final approval where residents can give their input.
Local Property Tax Increases
| City/County | Percent of Increase | Annual increase for median value home | Vote |
|---|---|---|---|
| Dakota County | 18.5% | $142 (for home valued at $392,100) | 5-2 |
| Ramsey County | 8.25% | $53 (for home valued at $306,000) | Unanimous |
| West St. Paul | 7.28% | $65 (for home valued at $309,950) | Unanimous |
| Inver Grove Heights | 7.19% | $116 (for home valued at $376,800) | Unanimous |
| Mendota Heights | 4.42% | $66 (for home valued at $553,200) | Unanimous |
| South St. Paul | 11.49% | $210 (for home valued at $298,973) | 6-1 |
| St. Paul | 6.8% | $58 (for home valued at $290,000) | Unanimous |
Note: Property taxes are ridiculously complicated. Each increase only applies to that portion of the property taxes, not the entire bill. The percent increase, while a comparable number to look at, doesn’t always translate easily. Last year West St. Paul had a lower percent increase (5.82% vs. 7.28%) but a much higher median value home increase ($230 vs. $65). Individual property taxes are also dependent on property values in relation to neighbors, which can often drive increases. Median home values differ for each area, so it’s difficult to compare apples to oranges. The fiscal disparities program can also change numbers—it dropped West St. Paul’s impact from $92 to $65 while leaving the percent increase the same. We explored property tax complexities a few years ago, which might help explain some of the nuance (or just muddy the waters).
What’s Driving the Increases?
All municipalities are facing increases due to rising costs. Inflation is one factor across the board, and unfunded mandates from the state and federal government are hitting counties especially hard. Additionally, Dakota County faces dwindling reserves that give them little flexibility. South St. Paul has several significant drivers, including the Doug Woog ice arena.
More Cuts for Dakota County
The sharp increase for Dakota County has drawn intense scrutiny, though the proposed budget already includes more than $10 million in cuts, including at least 23 full-time equivalent staff positions. And there will likely be more, since those numbers were based on an 18.7% increase proposed by the county manager. However, the board approved a 17% increase with another 1.5% going to reserves. So while the final 18.5% number is close to what was proposed, it actually requires another 1.7% worth of cuts, which could amount to around $3.7 million in additional cuts.
Despite the large increase, Dakota County will still have one of the lowest property tax rates in the metro, and even one of the lowest among large counties in Minnesota.
Do the Numbers Ever Come Down?
Since these are preliminary numbers, it’s important to remember that city councils and county boards can work to reduce the increase. But does that happen?
Yes. Last year West St. Paul’s increase dropped from 8% to 5.82%.
Many elected leaders said they want to see the numbers come down and some staff said they expect to find more efficiencies so they can lower the increase by December.
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5 Responses
Could you please provide us tax payors a list of the unfunded mandates for Dakota County and West St Paul? Thank you.
Not easily. See page 306 of the agenda packet from Tuesday’s meeting: https://dakota.legistar.com/View.ashx?M=PA&ID=1427540&GUID=E9FADE78-6E10-4574-B676-1B07AE4BC379 That gets you some of an answer. If you want more specifics, I’d recommend contacting County Commissioner Joe Atkins.
Where are the budget cuts likely going to come from?
Don’t know. They didn’t discuss what those cuts would be.
This came from today’s email from Dakota County Commissioner Joe Atkins: “Following Tuesday’s preliminary levy vote, additional cuts are expected to total more than $13 million. Exactly where those reductions will occur is still being worked out, but we have left more than 50 positions unfilled across virtually every county department. Potential reductions include park services and programs, library hours and materials, and social-service programs.”