Another tax hike? Medina residents protest

Medina residents are protesting the city's proposal to increase its tax levy by 34.8 percent -- the highest hike proposed in the west metro area.

At the city's truth-in-taxation hearing this week, resident Neal Barnes asked for showing of hands: How many people in the room thought the city's proposed taxes were reasonable?

Silence.

"How many people think we're getting hosed?" he yelled.

Laughing, clapping. The nearly 70 residents in the room raised their hands.

Throughout the meeting, they stressed the point: At a time when home value assessments are high -- and when Hennepin County is asking for its own increases and the state's limited market value program that amounted to a tax break is being phased out -- a city is going to have a tough time justifying a double-digit levy increase.

To the owner of a home valued at $303,000, Medina's preliminary levy -- which the city can and likely will trim -- translates into $539 in city taxes, $115 more than in 2007. And that's just 18.5 percent of the resident's total property tax bill after county, school and other taxes are added in.

"We are not increasing salaries. We are not changing city services," said Mayor Tom Crosby. "We are changing the philosophy of how we pay for things."

But residents questioned why a city with a population of 4,500 and a rural character needs the kind of infrastructure it is proposing.

Mike Wolfe moved to Medina 20 years ago, when the population was small, lots were large and most roads were gravel.

"Do we have to have the best roads? Really?" he asked. "We should go back to gravel roads. I didn't mind that."

Medina's city leaders have defended the proposed increase, saying that it puts them on par with other area cities. Its tax rate -- the city's total levy divided by its tax base -- is 18.5 percent, while Greenfield's is 25.4, Plymouth's is 23.4 and Minnetrista's is 27.8, according to city staff.

And Medina's per-capita spending has always been lower than other cities, city officials said. In 2007, that amount was $447, while the 11 closest neighboring cities averaged $512.

Medina has seen substantial growth in recent years, and its tax base has grown along with its taxes. The city's total market value has grown 87.3 percent from 2003 to 2007, according to city budget figures. City Administrator Chad Adams estimated that 60 percent of the increase was due to rising property values and 40 percent was due to new development.

Bob Franklin, a longtime resident, past council member and retired Star Tribune reporter, questioned why that growing tax base hasn't reduced the city's tax rate, saying the city must be doing a lot of spending to keep up.

"As the tax base increases dramatically, it would be reasonable to expect the tax rate to go down," he said.

Barnes owns a business in Medina's uptown Hamel -- Endeavor Design, a product design and development company. His taxes for the old feed mill building where his business is based have gone from about $6,600 in 2005 to about $9,400 in 2007, he said. The increases have come from all directions -- tax hikes by the school district and the county, and due to the rising assessed value of the property. With this year's increases on top of the last three year's, he's not sure he can stay in town much longer.

After hearing from residents, the City Council set a work session for Monday to discuss ways to trim the budget. Some ideas: Raise more money through fees, defer hiring of certain staff, and bond for road construction.

The council will likely set the final levy at its Dec. 18 meeting, Adams said.