Ramsey County proposing 6.75% property tax levy hike as part of 2024-25 budget plan

Ramsey County officials are proposing to increase property tax revenue by 6.75% in 2024, roughly double the county's average annual levy rate increase in recent years.

That doesn't mean all Ramsey County taxpayers will see their taxes rise by that rate. Rather, they'll see increases or decreases in proportion to the change in their property's value, as well as the levies approved by their respective cities and school districts.

"We actually anticipate that most St. Paul homeowners are going to see a hold-even or a slight decrease on their property tax bill, and in suburban Ramsey County, a hold-even to a moderate increase," County Manager Ryan O'Connor said.

O'Connor pitched the levy increase last week to the Ramsey County Board as critical for maintaining services at a consistent level — especially as the need for social services continues to be high — and to retain staffers.

O'Connor said that despite an increase in county aid passed by the Legislature this year, other pandemic-related funding from the federal and state government that has supplemented the budget in the last few years is drying up.

The levy increase would help pay for the first year of the 2024-25 biennial budget for Ramsey County, the only one of Minnesota's 87 counties to use such a process. O'Connor's proposed 2024 county budget is $813.4 million, 3.48% bigger than this year's spending plan.

For 2025, he proposed an $841.8 million budget accompanied by a 4.75% tax levy increase, an amount he said could shrink when the county factors in sales tax revenue from marijuana sales.

O'Connor characterized the proposed 6.75% levy increase as a catch-up number, since the county kept its 2021 levy flat amid concerns about pandemic pressures on residents. The tax levy went up by 1.5% in 2022, and 4.5% in 2023.

"This is a year we're trying to catch that budget up and really make sure we're on stable footing going forward," he said.

County estimates of how property taxes will change in 2024 should be considered preliminary, because they use assumptions to calculate tax information from cities, school districts and other jurisdictions that hasn't been released or factored in yet.

Current projections suggest the owner of a median-value home in St. Paul would pay an estimated $92 less in property taxes next year, while projected tax hikes for median-value homeowners in Maplewood and Roseville range from an estimated $80 to $138. Owners of commercial and industrial property may see tax hikes because of faster increases in property value.

In July, the first month that hemp-derived THC gummies and drinks were subject to the state's new tax, the state took in upwards of $594,000 in revenue, some of which will go to local governments, according to the Minnesota Department of Revenue.

Matt Hilgart, government relations manager with the Association of Minnesota Counties, said he's not surprised local governments are thinking ahead about the new revenue stream. But he said it's unclear so far how significant the tax revenues will be from the sale of marijuana — a new industry that's likely to grow.

"I'm hopeful that it's actually a significant amount of revenue," said O'Connor, who expects to know more next year when the state Department of Revenue provides estimates to counties.

Using ballpark figures, O'Connor said that $3 million in marijuana sales tax revenue could decrease Ramsey County's 2025 levy increase by 1 percentage point, while $12 million could decrease it by 4 percentage points.

It's too early to say how Ramsey County's proposed levy increase compares to other counties statewide, since most of them have yet to release their budget proposals. St. Paul Mayor Melvin Carter last month proposed a 3.7% property tax levy increase for his city, and Roseville officials are pitching a 9% property tax levy increase, as are Maplewood officials, according to city Finance Director Joe Rueb.

In the coming weeks, Ramsey County board members will hear presentations on budget proposal specifics. The county will hold a public hearing on the budget proposal on Sept. 19, before the County Board sets a maximum tax levy Sept. 26. County officials expect to send tax estimates to property owners in November. Another public budget hearing is expected to be held before the County Board approves the budget and levy on Dec. 12.