Twin Cities metro-area homeowners facing friendlier property-tax outlook

Property-tax payers are catching a break at an opportune time in the Twin Cities metro area — thanks in part to counties well-versed in the challenges posed by a pandemic.

Ramsey County opted early this budget season to back off plans set forth a year ago to raise taxes by 4.5% in 2021, opting instead to keep its tax levy flat.

Hennepin County also went with a 0% increase in an effort to ease costs to homeowners, said County Administrator David Hough, who noted recently: "Our residents are challenged, just as we are."

A Star Tribune review of potential property tax bills in 89 metro-area communities showed a majority of homeowners in one-third of the cities are in store for a savings next year, a departure from recent years. In Minneapolis, the owner of the city's median-valued $271,500 home is on track for a decrease of 5.9%, or $226.

Still, individual homeowners, especially those with rising property values, reported spikes in their notices, and they aired frustrations in Truth in Taxation hearings held via video conference due to the pandemic.

In St. Paul, Dennis Chisholm told school board members that the notice he received signaled increases of more than $100 for each of the three major taxing jurisdictions: city, school district and Ramsey County. He is a lifelong Democrat, he said, and he warned of a middle class being fed up with serving as the government's ATM.

"I see more and more angry people, more people voting Republican, hoping for a change," he said.

The school district, with its 4.8% levy increase, was the main driver of the $47 hike being projected for the owner of St. Paul's median-valued $215,800 home. School spending was a factor in increases forecast in Anoka County, too.

Statewide, the preliminary property tax outlook for 2021 showed government leaders considering hikes less than those that were in play a year ago for 2020. Collectively, the state's counties had a total increase of 1.5% on the table as they entered final deliberations this month, according to the Minnesota Department of Revenue.

The restraint exercised in Hennepin County led to an unusual development during its Truth in Taxation hearing when Grace Baltich, president of Local 34 of the American Federation of State, County and Municipal Employees (AFSCME), said the state's most populous county should have raised taxes.

Baltich, in an interview later, said she lives in Champlin and her notice showed a tax savings while her property's value went up. The county should have increased revenue to better serve residents and reduce the risk of cuts in services, she said. She noted the library system had 66 unfilled positions.

Hough said the county has been able to balance its budget without laying off employees, and that no layoffs were planned in next year's budget. Not filling the 66 library jobs saved the county $5 million, he added.

The county was able to serve those who have suffered in the pandemic and avoid a levy increase through the infusion of $220 million in federal CARES Act funding, Hough said.

More than a million masks were distributed, homeless people with COVID-19 given shelter and thousands of contact-tracing investigations conducted, he said.

At the same time, Hough added, many residents were losing jobs, and when it came time to propose next year's budget, it became clear to him that the property tax levy should be kept flat.

Now, the county faces a Wednesday deadline to spend the federal money as human-services needs continue and vaccination costs loom.

Asked about the risks of a 0% levy, Hough said that even without federal dollars, services would continue amid hopes for approval of new federal funding.

In the meantime, he said, the county has put a $16 million contingency fund in place to cover costs.

Anthony Lonetree • 612-673-4109