Hennepin County Board considering 4.5% maximum property tax levy for 2023

The Hennepin County Board is considering a 4.5% maximum property tax levy for 2023 — $9 million more than proposed by the county administrator.

The financial hardships of the pandemic had prompted commissioners in 2021 to approve a 0% property tax levy increase, and Commissioner Irene Fernando said the county must be ready to cover more of its own costs again.

"I think we need to have a larger reserve of money as the significant amount of federal money ... received during the pandemic shrinks up," said Fernando, who submitted the 4.5% levy to her colleagues last week.

Fernando said she's still open to voting for the lower, 3.5% levy proposed by County Administrator David Hough, but she said she wanted financial flexibility as she waits for more information from staff on county service strategies.

A 4.5% levy would fund nearly $1 billion of the 2023 budget of $2.57 billion, slightly larger than the 2022 budget. The board on Thursday backed Fernando's proposal by a 5-2 vote, though it must still vote on final approval Dec. 15, and there could still be efforts to trim back the increase.

Commissioners Chris LaTondresse and Debbie Goettel voted against the higher levy, arguing that 3.5% was an appropriate amount. But several commissioners raised concerns about how to continue investments in affordable housing, education, climate action, employment and maternal and infant health that was covered in significant part by the one-time federal pandemic relief money.

"I've heard from many residents, especially those with fixed incomes, expressing concerns about the impact of rapidly rising property values on their final tax bill," LaTondresse said. "As your commissioner I believe in a balanced approach that prioritizes fiscal responsibility and smart investments that enable us to better serve our community and build for a better future for all our residents."

Goettel noted that many cities are already implementing double-digit property tax levies and school board levies. LaTondresse said his own property assessment value went up 25% and that suburban properties are getting hit much harder than those in urban core cities.

Commissioner Kevin Anderson said he's concerned as federal pandemic dollars phase out by the end of the 2023 budget that it would create pressure for an even higher levy. The county to date has spent more than $550 million in federal relief funding.

Commissioner Jeff Lunde said local officials needs to reach out to legislators who failed to distribute a significant surplus during the last legislative session.

The operating portion of next year's budget totals $2.24 billion, an increase of $72.1 million from the adjusted 2022 budget. Staff have proposed a 2023 budget of $31.8 million for the Regional Railroad Authority, which will help fund the Blue Line light-rail extension.

In delivering his 2023 budget last month, Hough highlighted many of the programs funded in this year's budget. The county has spent about $2.35 million annually to reduce health disparities in young families, reaching out to about 450 families.

The county also raised its minimum wage to $20 an hour and trained hundreds of people who ended up with higher paying county positions. Since the beginning of the pandemic, the county directed about $7 million to 75 agencies that provided food through pop-up sites, food shelves and pantries, community organizations and community events.

The county is also planning on spending $91 million in investment toward road, bridge and trail infrastructure. Another $36 million is planned for a parking ramp expansion and a new in-patient bed tower at Hennepin Healthcare.