Property tax levies for 2011 up by 2.6 percent – the lowest increase since 2002
Saint Paul, MN – November 26, 2010 – (RealEstateRama) — Property tax levies will increase an average of 2.6 percent statewide if proposed local tax levies are adopted later this year, the Minnesota Department of Revenue announced today. This compares to last year’s 3.1 percent increase and an average change of 5.3 percent over the past three years.
The proposed increase for taxes payable next year is the lowest since the property tax system was overhauled in 2001.
“Most local governments appear to have done a good job in managing their budgets to minimize tax increases on property taxpayers,” said Revenue Commissioner Ward Einess. “The state-imposed property tax cap also was a factor in helping local governments to be fiscally responsible.”
Enacted in 2008, the property tax cap limits levy increases by counties and cities with populations over 2,500. This year, the cap is 1.68 percent. Special levies for debt, public safety and certain other costs are not subject to the cap.
The proposed increase is based on maximum levy amounts proposed by local governments in advance of annual Truth-in-Taxation hearings, which begin the week of November 29. If those hearings result in a decrease in proposed levies, the projected growth will be even smaller.
“Taxpayers can further influence local decisions about their property taxes by attending their Truth-in-Taxation hearings,” Einess added.
If the proposed levies were approved, local property taxes would increase in 2011 by $203.1 million statewide. However, local jurisdictions have historically reduced their levies by $20 million to $60 million statewide after Truth-in-Taxation hearings. In 2010, final levies were $30 million less than first proposed.
Levy increases will vary by community and by property type due to differences in budget and tax decisions that affect school, city, county, town and special districts.
Average increases
Proposed average levy changes by jurisdiction type are shown below:
| Estimated property tax levy increases by jurisdiction Payable 2010 actual to Payable 2011 proposed |
|
| Cities | 3.4% ($62.9 million) |
| School districts | 2.5% ($55.8 million) |
| Counties | 1.7% ($43.2 million) |
| Townships | 3.5% ($7.4 million) |
| Special taxing districts | 4.2 ($12.9 million) |
| Statewide property tax | 2.7% ($20.9 million) |
| TOTAL LEVY INCREASE | 2.6% ($203.1 million) |
City and county increases
Statewide, cities proposed an average levy increase of 3.4 percent, down from the 5.4 percent growth proposed last year (when the final increase after local hearings was 4 percent). This compares to an average of 5.5 percent over the last three years.
Nearly 6 in 10 cities have a levy increase of less than 5 percent – including 252 cities (30 percent) that proposed no change or a levy decrease. Cities with 2,500 or more residents proposed an increase of 3.3 percent, compared with a 5.0 percent increase proposed by smaller cities not subject to the limits.
| Highest increases in cities with over 50,000 population | Lowest increases in cities with over 50,000 population | ||
| Rochester | 8.4% | Eden Prairie | 2.3% |
| Minneapolis | 7.0% | Blaine | 1.4% |
| Maple Grove | 5.5% | Plymouth, St. Paul, Lakeville | 0% (unchanged) |
| Burnsville | 5.5% | Bloomington | (-0.1%) |
| Brooklyn Park | 4.1% | St. Cloud | (-3.0%) |
Statewide, counties proposed an average levy increase of 1.7 percent, down from the 3.2 percent growth proposed last year (when the final increase after local hearings was 3 percent). This compares to an average of 5.1 percent over the last three years.
About 1 in 4 counties have a levy increase of less than 5 percent – including 21 counties (24 percent) that proposed no change or a decrease. Five counties proposed a levy lower than the previous year. Carver has the biggest dollar decline at $600,000; McCleod has the biggest percent decline at –2.9 percent.
| Sampling of proposed county increases | |
| Hennepin County | 0% (unchanged) |
| Ramsey County | 2.75% |
| St. Louis County | 0.6% |
School district increases
School districts proposed an average levy increase of 2.5 percent, down from last year’s 3.3 percent growth. This compares to a 6.1 percent average change over the last three years.
Newly passed referendum levies comprise 29 percent ($16.3 million) of the increase, as voters approved more than half of the proposals on the ballot statewide. In all, 77 school districts had an operating levy referendum for 2011; 43 of them passed, at least in part.
Truth-in-Taxation hearings
All special levy claims must be pre-approved by the Department of Revenue. The department will complete its review and report back to the county or city by December 10.
Final tax amounts will be determined following Truth-in-Taxation hearings, which are required in all jurisdictions with populations over 500 that are proposing increases higher than inflation (1.68 percent).
The time and location of the hearings can be found on property owners’ Truth-in-Taxation notice. Counties mailed these documents to property owners in November, and are required to publish hearing information in city newspapers.
- Proposed County Property Tax Changes for CY 2011 (Excel doc)
- Proposed City Property Tax Changes for CY 20101 (Excel doc)
Contact:
Lisa Waldrup, Minnesota Department of Revenue
(651) 556-NEWS
email: lisa.waldrup (at) state.mn (dot) us
