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Average Minnesota property tax increase at record low

There has been plenty of fuss over proposed double-digit property tax increases in Minneapolis. Good news for the state: Minneapolis is not representative of a trend -- quite the opposite.

According to data just released by the Minnesota Department of Revenue, the average proposed tax increase for Minnesota property owners is just 2.6 percent -- a 10-year low. The statewide average for the past three years is 5.3 percent.

Minneapolis property owners will not be surprised to learn that their city ranks high on the list of highest increases in cities with a population of 50,000 or more. Only one city is proposing a higher increase: Rochester’s 8.4 percent increase tops the list.

The proposed Minneapolis increase -- driven by the burden of a city pension fund hollowed out by the recent stock market crash -- is at 7 percent. Maple Grove and Burnsville are tied for third with 5.5 percent increases. The lowest increases for cities with a population of 50,000 or more are Bloomington (-0.1 percent) and St. Cloud (-3.0 percent).

Minneapolis property owners would do well not to ask their friends in St. Paul how they’re faring. Property owners there won’t see any change in what they pay to the city. St. Paul is one of 173 Minnesota cities with no proposed change in property tax levels.

Here’s a chart showing the highest city levy increases in cities with over 50K population:

A chart showing the highest city levy increases in cities with over 50K population.

County level
Minneapolis property owners can at least be grateful that their county didn’t add to their tax bill. Hennepin County isn’t proposing any changes for 2011. Ramsey County is proposing a 2.75 percent increase. 

Here are Minnesota’s five largest counties ranked proposed property tax increases:

Ramsey 2.75%
Anoka 3.5%
Dakota 0.8%
Hennepin 0.0%
Washington 0.0%

Want to know what the increase is for your county or city? Check out our interactive map of Minnesota counties over at Many Eyes. Zoom in and click on your county to find out how much more or less money you’ll be sending to the county in 2011.

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Comments (33)

There's a problem with your data. I live in St. Louis Park and I just got my property tax estimate for 2011 Henn Co. It's a 9.3% increase. I don't know where your getting that zero figure for Henn. Co. but it's wrong.

Yes, with my feet in the oven and my head in the freezer, my average temperature is perfect.

For some things, averages don't work well. More useful data would be the percentage of all homeowners falling into various categories- decrease, no change, 1-5% increase, 5-10% increase, 11-15%, >15%, etc. Have that for us?

The data comes from the Minnesota Department of Revenue: http://taxes.state.mn.us/publications/Pages/Property-tax-levies-for-2011...

Wow- This article caught my eye because I had the opposite experience. I just got my PROPOSED property tax statement yesterday in the mail. Taxes jumped 14.7% over last years. I live in Grant(between White Bear and Stillwater which is in Washington county).

Whether or not the data is accurate, the assumption that the property tax increase is due to the pensions is unfair. A truly data driven report would look at the changes in all sources of revenues and expenditures; the conclusion about pensions and stock market is opinion (plus to dow has gone up from 8,000 to 11,000 in the past 18 months..was at 14,000 but it is definitely up) pa. Great to use the data, but if you are going to do so, make sure to test your own assumptions, too

@Paul, are your increases due to St. Louis Park's city increases?
http://www.stlouispark.org/property-taxes/council-sets-preliminary-tax-l...

@Molly, the pension situation has been explained in earlier reporting, and by RT Rybak on his blog:
http://themayorblog.com/2010/11/19/fighting-to-keep-property-taxes-down/

Paul, I reached out to Rachel Walker at the League of Minnesota Cities for an explanation of the discrepancy you pointed out--how is it that Hennepin County can be claiming a zero percent increase when you see a county increase on your property tax estimate?

Here's what she said:

Very simply put, a home’s tax bill could be increasing because the home saw an increase in value (so now it has more taxable value).

More likely, value has shifted around. The key to this issue is that every parcel in the county is just one piece of the pie. Each year, taxes for that whole pie are determined and then distributed.

In other words, it matters to each parcel what happens to all of the other parcels in terms of value changes. Each parcel’s tax bill is affected by the levy amounts AND the value changes of all the other parcels in the jurisdiction.

A home’s tax bill could be increasing because its value stayed flat while many other home values fell—the result being that the home in question is a bigger piece of the pie and therefore bears more of the tax burden.

Finally, a home’s tax bill could be increasing even if the county levy stays flat because other jurisdictions are increasing their levies—like the city or the school district. The TNT notices show all of the taxing jurisdictions together.

I hope that helps. The resource that we are featuring on our website: “14 reasons why your property taxes go up and down” might be good background for you and your readers. Here is a link:

http://www.youtube.com/watch?v=C70drDdHHIA

Glad I bought a house in MPLS this year and supported urban living, reaping the rewards with my tax money going towards.... PENSION BENEFITS??? Ugh... Thanks past city managers, I would hate to see my money go towards developing the city.

Paul, It looks like the data refers to the total levy for the county remaining unchanged. Taxes on specific properties can still change depending on it's value in relation to the values of other properties.

If some properties realized 30% decreases in values, properties that stayed the same or declined less in value might see increases in order to offset that.

I am a retired registered nurse living in Rochester for the past six years. This year, my property taxes increased, but the assessed value of my house and property remained the same as the day I bought the house. Now, property taxes will be even higher. They increase yearly?

I have not seen any huge changes in the appearance of Rochester, nor services. I do wonder if there was a cost involved in placing statues of geese painted in bright primary colors throughout the city. Personally, I think they are ugly and corny, but we do live in a corn growing area.

I suggest that the corporations of Mayo and IBM are in a much better position for payment of taxes and their increases. I am a retired, single female living in a tiny house on a postage stamp sized property and my taxes will increase by 8.4% in the coming year. This year I paid a large increase in property taxes. Do I need to donate blood as well?

Paul and Rachel, my property value went down for the 3rd year in a row. It was at $260,000 3 or 4 years ago. This year it's at $204,000 which is $10,000+ less than last year but my property tax is higher by $350+ so I frankly think your arguements just don't hold water.

All I know is I'm going to be paying more for taxes, more for health insurance and my social security - guess what - is NOT having a COL adjustment this year. How are people supposed to pay their bills when this keeps happening?

This is how property taxes are determined. Your property is assessed. It is supposed to be market value, but usually the counties make it about 10 percent low across the board. That is fair and people don't argue. Then the county commissioner, city councils and school boards decided what they need to spend. Each one divides the total amount of spending by the total valuation and they get a rate. Then the rate is applied to your property. So, if EVERYONE else's property went down and yours stayed the same, your taxes go up.

Suffice it to say, because the state has refused to acknowledge increases with Pawlenty's No New Taxes attitude, the cost of government has been shifted to local governments, which rely on property taxes. And they are is going up in most places

It costs money to do things. Apparently huge numbers of voters don't get that.

All in all, I think government wastes far too much and spends far too much. I do not think I have ever seen a private business as inept, inefficient and unresponsive as governments, and I have seen many private businesses when doing consulting work.

Politicians do need to do a better job of managing government. Alas, they seem to lack the will to do so because they gleefully delight in rewarding their friends and allies with well-paying jobs. Republicans and Democrats are alike in their interest in spending taxpayer dollars to enhance the well being of themselves and their friends.

If governments did undertake needed improvements, they could easily cut costs by 20 to 30 percent.

//Paul and Rachel, my property value went down for the 3rd year in a row. It was at $260,000 3 or 4 years ago. This year it's at $204,000 which is $10,000+ less than last year but my property tax is higher by $350+ so I frankly think your arguements just don't hold water.

Nila, I make no argument, I'm simply reporting what my proposed property tax statement tells me.

As to all these explanations, yes I know all this, but my home is the very definition of a median home and home value in Henn Co. It's valued at $193,000 this year, and it was $210,000 in 2008. Not a huge drop. My property taxes have gone up steadily at around 9% for the last three years. My house is 60% of the housing stock in SLP, Golden Valley, and Richfield. I just find it hard to believe that my property is that unique. All the post war cape cod houses in the first ring suburbs have done a good job of retaining value, that's a lot of houses. We've got foreclosed properties, but we haven't seen 20%-30$ loss of value- more like 5%-15%. And yes, I see how that could drive my particular levy up, but that's my point, my circumstance is not that unusual, so how many properties are there like mine? They have the data, they can break it down and tell us quartiles or whatever in terms of the percentages of people who are seeing what increases. I'd have see that data before I'd buy the argument that most of us are seeing a big decrease in property tax increases.

Statistics can be tricky, especially if your relying on averages. You can have a low average that doesn't reflect the majority of circumstances. I'd like to see the mean (average), median, and mode (range that occurs with the most frequency). What I'm saying you could have a report that says averages are low, but still a majority of people are seeing above that average tax hike. If that's the case, this information is misleading.

I'm not complaining about the my taxes, we'd all be paying lower over-all tax rate had it not been for the Republican income tax cuts. If you restored LGA and the income tax none of your local levies would have risen by anywhere neat this much.

Rebecca Hoover writes
"If governments did undertake needed improvements, they could easily cut costs by 20 to 30 percent."

That is fantastic news. Please detail your proposal & send it to our political leaders. Or, heck, send it to me & I'll pass it on. I'd love to see some cost savings, as would every taxpayer, I'm certain. Lets get moving on this!

@Rebecca

I would totally disagree. Private business wastes money ALL THE TIME.

I second Jeremy (#16). That was my experience and observation, as well.

Still, the line is “There are lies, damned lies, and statistics.” Especially with homes at the low end of the single-family value scale, I’m still waiting for an explanation of the combination of decreased value and higher taxes that makes sense to me.

My case is complicated by the fact that I bought a former rental property, and the “Homestead” adjustment just kicked in this year, so to compare apples to apples, I can only go back to last year. Still, the house was valued at $125,000 in 2008, $105,000 in 2009, and is now valued at $100,000.

The latest $5,000 decrease in value produces the following tax increase percentages:

Hennepin County: 9.42%

City of Minneapolis Park Board: 8.64%
Remainder of City Tax: 8.48%

Minneapolis School District: 8.8%

Met Council: 9.05%

Other Special Taxing District: 60.67%

Fortunately, that last item – whatever it is – is a small dollar amount, from $13 and change to $22 and change. I’d nonetheless like just a teeny bit more information about what, exactly, I’m paying for in that “Other Special Taxing District” that requires an increase of more than 60%.

The overall increase is 13.2 % on a house that decreased in value by 5 %. I’m not anti-tax per se, but I’m also not comforted by the suggestion that Hennepin County taxes aren’t going up – my Hennepin County taxes certainly are – or that the “average” statewide increase is only 2.6%, or that state property taxes are at record low levels. My basis of comparison is Colorado, where my property taxes 2 years ago on a comparable property were just over half of what’s being proposed for my current one. From the PR standpoint, it doesn’t help that these things arrived in the mail only a day before the hearing in Minneapolis.

Just for balance, however, it’s useful to remember that most of the people writing in to MinnPost to complain about their taxes, me included, live like kings and queens compared to the rest of the planet, where the majority of the population gets by on $2 a day. Nothing wrong with complaint, but we should all be counting our blessings.

Yes Rebecca, there is no economic data to support the notion of superior private sector efficiency. Such efficiency is simply a matter of faith in some circles. In fact, many studies have shown that the public sector does more with fewer resources more efficiently than the private sector. For instance the VA and Medicaid have for years now rated the highest in customer satisfaction and they have fraction of the administrative costs of any private sector insurer or provider.

By the way, Jeff, Thanks for taking the extra time to look into my circumstance, I appreciate it. I just suspect something hinky is going on with those averages. In order for median properties like mine to be seeing almost a ten fold increase over the zero average Henn is reporting, a significant number of properties would have to be getting massive cuts it seems to me. Is anyone here who lives in Henn Co. seeing a 10% cut in the proposed property taxes? If there is, I'd really to see those properties. If there is, my guess, bank owned forclosures. But I have no data to support my suspicions so I could be way off.

Interesting how people are ready, willing and able to call out a statistical snow job when it's affecting them directly.

The numbers don't mean much when you see your bank account take a direct broadside, do they?

Will we see the same outraged reaction next time some leftist tells us that wealthy taxpayers need to pay more taxes because the pay a lower *rate* than the middle class...despite the fact that the top 20% foot 70% of the bill?

"despite the fact that the top 20% foot 70% of the bill? "

Which is no surprise when they earn close to 70% or more of the income.

@ Mr. Swift…

“I just think that - when a country needs more income and we do, we're only taking in 15 percent of GDP, I mean, that - that - when a country needs more income, they should get it from the people that have it.”

Warren Buffett

I believe a certain Mr. Gates has also suggested that he be taxed at a higher rate.

Just sayin'…

Those who doubt that there is widespread waste in state government may wish to review the bienniel budget documents that will be posted in the beginning of the year at the state's Office of Management and Budget web site. Also, you may wish to review some of the organizational charts for state agencies that are posted on the state's web site in various places.

If you take perhaps 20 hours to study these items even the most generous soul is left sharing one's head. Of course, those who work in government always claim government is doing a great job. More objective consultants who have edin both the public and private sectors generally have a different opinion.

It is true that a few programs such as Medicare are very well run. Those are the types of programs I am happy to help support.

Let me give you just one example of many, many efficiency problems in state government -- almost every state department has a computer security officer and probably some additional security state. In corporations, however, all departments will share one small unit that sets policy for the whole organization. Or another example pointed out by AFSCME is the swollen ranks of managers in state government -- there are way to many.

Rebecca, You forgot to mention fraud and abuse.

I remember Governor Pawlenty campaigning on rhetoric similar to yours. Pawlenty was going to cut the "billions in wasted state spending" and that was eight years ago. Although he did manage to nick LGA a few hundred million, But no where near the mythical "billions and billions" that the governor claimed existed.

Is this an admission that it is a lot harder to find than the governor claimed? Or that it does not exist all?

//Interesting how people are ready, willing and able to call out a statistical snow job when it's affecting them directly.

It's even more interesting how people fail to comprehend statistics when they directly effect them. No matter how many statistics you throw at some people they still think trickle down economics and low taxes for the healthy benefit everyone when they really do is make the wealthy wealthier.

Richard, Re: Rebecca: Both houses in Minny were populated by Democrats. Pawlenty was only the goaltender. He did what he could, if Dems had their way, we'd be in much worse straits.

This is all a bunch of mathematical crap. The CPI has only gone up 2% in the past year. I haven't had a raise in two years, yet somehow "just" 2.6 % is supposed to be a good thing. Figure out how to cut the budget already, because I sure have to.

Dave, With all due respect, all I read was an excuse. Pawlenty is the chief officer of our state. If he makes claims and says that's what he will do, shouldn't he be held accountable to those statements? The DFL controlled both houses when he made those claims. Was there any reason for him to think that was going to change during his eight year tenure?

Speaking of Statistics: David, Pawlenty increased your over-all tax burden by pushing it down to the local governments. It's simple math, whatever city, or county you live in has fewer people than the state of MN as whole. So when you have to make up for budget cuts locally it increases your individual share. There around five million people in MN. Let's say you have 50,000 in your city, and lose a million dollars of LGA. That million used to cost you twenty cents when it was state money, now it will cost you twenty dollars because you have to raise it locally. This is how your $300 tax cut ended up costing you $1,200. Pawlenty didn't hold your taxes down, he increased them, this was predictable, and it was predicted. We've seen it before, the same thing happened under Reagan on a national level. I don't know what "gate" you think Pawlenty was holding but he didn't hold taxes down, and he never balanced the budget, and that has not been a good thing for you.

Craig, and everyone else who's been whining about your property taxes... look there's a reason we have (or had) multiple streams of tax revenue. While property taxes work well for some types of revenue there are inherent inequities built into them. That's why we also have income taxes, sales taxes etc. The problem with property taxes is they push all expenses down to a local level where there are huge discrepancies in population and property value. The cost of government has nothing to do with the value of your home. The price of the gas that runs the snow plows for instance is not tied to your home value, but you have to buy the gas anyways. State aid cushions you by deriving that revenue from a larger population and lowering your individual share. Multiple revenue streams create a buffer. Since local government cannot collect income tax, they must use property taxes and they can only collect them locally. So yeah, though the value of your home has decreased, the cost of your services have not, and you've lost the state money you used to be getting (thank Pawlenty for that). I'm sorry but you should have done the math before signed off on your tax cut and refused to put another $5.00 into the state pot. That five dollar break is now costing you twenty.

As far as your salary is concerned, taxes in and of themselves do not make or break economies. The reason we're in a recession is trickle down economics that magnified wealth disparity and over-financialized the economy. Tax policy eventually compounded the problem by creating huge government deficits and restricting governments ability to regulate and respond to crises. The financial sector took advantage of the situation (as they always do) and the resulting white collar crime wave wrecked the economy, as it always does. We could eliminate all your taxes at this point and it wouldn't get you a raise, or a job. In fact, history has shown that the best way to stimulate the economy is massive government spending. Typically the government deficit spends but we came into this recession with record deficits (due to Bush's tax cuts and spending) on the books to start with, and we're paying the lowest level of taxes in hundred years despite being at war and racking up trillions of dollars of bailouts for the private sector.

Yes Rebecca, it was your brilliantly efficient private sector that dragged us into this recession, not the government. Auto companies were handing out credit like candy to guys like Hecker, and banks can't even figure out who actually owns the properties they're foreclosing, and the government has had to bail them all out... and you think the government is inefficient?

Since the advent of modern democracy, no government has dragged a nation into recession, it's always private sector excess that creates recessions. The most stable economic period in history was period from WWII until the mid 70s, when we had tax brackets as high as 92%. Then we started deregulating the economy and defunding government (except for military spending) and now we're right back to 1929 and the Guilded Age that preceded.

So anyways, that's why your property taxes go up even though your property value has gone down. I'm sorry but the only people who didn't see this coming were faith based economists who think tax cuts and small government are the answer to everything. The more tax cut you get, the more small government you get, the worse it will get.

I always get a kick out of it when some wealthy guy, or group of guys take to the soapbox to proclaim their eagerness to pay more taxes.

They'd like, evidently, to have us believe there is something standing in the way of their unilaterally acting on their beliefs, which is singularly odd given the slim chance they ever let anything obstruct them in their quest to build their wealth and success.

Carpe Diem, gentlemen.

I always laugh when I see fetishism for the wealthy pretending to be economic theory.

@Paul. I did not say the private sector was "brilliantly efficient". I merely said that it is better than government. Your use of hyperbole does not do a thing to support the continued unnecessary spending in government.

You argument does not make a lot of sense. I don't think you can argue, for example, that the private Mayo Clinic would be better if it were government run.

Refusing to recognize that government needs a good clean up makes matters worse. And, by the way, this is not a partisan issue. Both Democratic and Republican politicians love giving taxpayer dollars to their friends.

The voters seem to recognize the situation as it is and are ready to vote out incumbents as long as necessary to make the point that government efficiency needs to be improved and frivolous spending stopped.

If you check the polls, you will see that my view of government is shared by the majority. At the same time, the majority is progressive -- supporting, for example, the public option (supported by 65 percent or more).

It is not that the average voter like myself is anti-government and pro-business. We want both cleaned up.

//@Paul. I did not say the private sector was "brilliantly efficient". I merely said that it is better than government. Your use of hyperbole does not do a thing to support the continued unnecessary spending in government.

Rebecca, you're statement is simply incoherent. "Better" at what? The private sector and the public sector perform completely different functions. The difference between the private and public sectors is not efficiency, it's mission. The public sector provides public services and does not seek to generate a profit. The private sector provides only those services and products that generate a profit. How can the private sector be "better" at doing what it doesn't do?

The problem with the "small" government ideology is it simply ignores economic reality. It pretends that everything can be done for a profit, and that profitability will ensure efficiency. This simply flies in the face of all historical experience. Civilized nations ended up with public sectors for a reason, there are a variety services that the private sector has no inclination or capability to provide. Furthermore, profit does not ensure efficiency, in fact it can increase inefficiency. Some of the most inefficient entities on the planet are huge multinational corporations earning massive profits (Think BP and Gulf oil spill).

Efficiency isn't a shrewd Republican insight, it's common sense. No one... NO ONE is championing inefficiency. We all want our government to do whatever it does as efficiently as possible. Republicans have been promising more efficient government for forty years and they have never never never never delivered. Why? because the government simply isn't as inefficient as they claim it is in the first place. Deficits are not caused by inefficiency, they are caused by revenue shortfalls. This is why no one has ever "efficiency'd" their way out of a deficit.

Nothing is perfectly efficient, that's actually a physical law of the universe. Can government be more efficient? Surely and that's what we all want. Can we significantly reduce the cost of our government with efficiencies? The available data says no. That's not a reason to accept inefficiency, but it tells us that that's not where the real money is. Why is our government relatively efficient? Because by and large our government is not very corrupt. The most inefficient governments tend to the ones that a are subject to massive corruption. Here's the thing, the more you privatize, the more you cut government salaries, the more you allow government capture by the private sector... the more corrupt a government tends to be. You saw this in action when Bush put his small government ideology to the test during and after hurricane Katrina, and in the Iraq war. The irony of the small government agenda is that it ends up increasing inefficiency, this is why despite decades of government cuts and privatization we're still looking at a record deficit. This is why corruption has run rampant through through Republican party (witness Tom Delay's downfall amongst many others) despite their frequent and constant promises to "clean up" the government. The problem with contracting out government work is... politicians get to decide who gets the contracts.

Be honest Rebecca, when you talk about "cleaning up" government, when you say we can save 20%-30%; you're making that up. You have no data or information to support those figures. We're supposed to take your word for it that we can save that money without cutting our services. Problem is we've heard this before, it's a bait and switch. Be honest, you're idea of an "efficient" government is one that doesn't do a lot of the stuff that it's currently doing... but that's not efficiency, that's policy. You're not going to get the government to do what it's doing for 20%-30% less, you're just going to get the government to do 20%-30% less than it's doing.

So be honest so we can have an honest discussion. Let's talk about what we want the government to do and not do. Let's talk about what services and programs you want to cut. Let's not pretend this is about efficiency. I know it's frustrating Rebecca but you don't to declare what's "necessary" and what's "unnecessary" spending. Those are policy decisions, and you live in a democracy where your fellow citizens have a say.

Getting back to the property tax issue in the article. I've decided the story, that property taxes in Henn Co. for instance are not changing, is probably quite misleading. The Henn Co. portion of my tax increase is 9%, $66.43 of the total $216.66 increase I'm seeing. That's about 30% of my total increase. Now it says in the accompanying document that: "even with a zero property tax increase, many homeowners whose values dropped... will still see and increase in the county portion of their proposed property tax statement".

Therefore the article's statement that:

Minneapolis property owners can at least be grateful that their county didn’t add to their tax bill. Hennepin County isn’t proposing any changes for 2011.

is simply inaccurate. While the county is not collecting any more money over-all, it is raising taxes for "many" homeowners. I think the real question is how many? I think another interesting question that arises is simply the mathematical fact that in order to preserve a zero increase over-all revenue stream, some properties must be seeing a significant decrease in taxes. Who are those properties? Where are those Properties? If many of us are seeing a 9% increase, what kind of decrease are other getting? Mathematically the decreases have to equal the increases in or to keep revenue static.

Again I'm not complaining, we can afford the $217. I just think in the interests of transparency a story that examines who's getting increased and who isn't would be more informative than one that tells us we're not seeing an increase. It could raise public policy questions as well, if rental, forclosed, non-homestead, properties are seeing tax cuts, someone should explain the rationale behind that decision. I guess the point is, even the net revenue is not changing, clearly the tax burden is being shifted. It would be nice to know who it's being shifted to and why. Looks to me like it's being shifted to median and even low income property owners.