How Hennepin County will spend a 5.5% property tax levy increase

The Hennepin County Board approved a 5.5% increase to its property tax levy Thursday to fund a $3.1 billion budget for 2025.

Property taxes fund about $1 billion of the county’s $2.54 billion operating budget and $568 million capital improvement plan. About 60% of the county operating budget comes from state and federal dollars dedicated to various social programs.

Hennepin County is Minnesota’s second-largest governmental body, after the state. Overall, county spending will grow by $135 million, or 5.6%, next year.

The impact of the county’s levy increase on individual tax bills will vary depending on the value of a property and the tax base of the community in which it is located. Other local governments like schools and cities levy their own property taxes, which also appear on tax bills.

About $55 million comes from the property tax increase and the rest from savings. County leaders noted that federal pandemic aid is spent and tapping savings will make up short-term gaps without impacting long-term finances.

Much of the new spending will go toward rising salaries and benefits for the county’s 10,000 employees. The size of the workforce is not expected to change, and county officials are finalizing new contracts with the 17 unions that represent about two-thirds of its workers.

More than 4,000 workers represented by six different AFSCME units approved new three-year contracts Wednesday that include 4% raises each year. That is on top of the regular increases some workers receive for their experience.

The new budget also includes $10 million toward covering the cost of uncompensated care at HCMC, the safety-net hospital overseen by commissioners and the Hennepin Healthcare System board.

The proposed capital budget includes $100 million for the Blue Line light rail extension. Another $45 million is slated for projects at HCMC, including work on a new parking ramp that will help make room for the eventual construction of an in-patient hospital tower.

County officials propose a budget each September and then modify it over the course of three months of analysis and debate. The County Board approved the tax-and-spending plan on a 6-0 vote, with Commissioner Marion Greene absent.

Hennepin County’s levy increase is higher than the 4.75% the Ramsey County Board is expected to approve next week. But it is smaller than some nearby counties and cities.

Minneapolis and St. Paul city councils both clashed with their mayors before finalizing budget plans. Minneapolis’ property tax levy will rise 6.8% next year and St. Paul’s will climb 5.9%.