Property taxes headed up in '03

Anthony Lonetree, Star Tribune

Published January 6, 2004 TAX06 in the Star Tribune

After a year of widespread reductions, property taxes were back on the rise in many Minnesota communities in 2003, according to the Citizens League's annual survey released today.

For a hypothetical $160,000 home, total taxes increased an average of 2.8 percent across 108 metro-area cities and towns last year, compared with a tax decrease of about 24 percent in 2002. The league's tax calculations include all taxes imposed on a home by cities, counties, school districts and other jurisdictions.

Residents of Brooklyn Center and Brooklyn Park paid the highest total taxes on a $160,000 home in 2003, with Minneapolis again placing third.

Tax rankings, however, can change significantly from year to year. Release of the 2003 survey comes several weeks after cities, counties and school districts finalized 2004 tax plans that, for example, bring relief to Brooklyn Center and Brooklyn Park taxpayers.

Bob DeBoer, program associate for the Citizens League, said Monday that it was too early to say whether 2003 increases signaled an unraveling of tax-relief efforts enacted by the 2001 Legislature.

In fact, DeBoer said, he had expected an even higher metro-area average increase. "We could be seeing some pretty serious attempts to rein in budgets and spending," he said.

The league's survey documented positive changes for several metro-area communities. In Scott County, Jordan residents, who paid the highest taxes in 2001 and fifth-highest in 2002, fell to 27th in the 2003 rankings, after $160,000 homes there saw a 14 percent tax reduction in 2003.

A similar drop was reported in Centerville, where the owner of a $160,000 home in the Anoka County community saw an 18 percent property-tax cut. Centerville homeowners slid from first on the 2002 tax list to 22nd in 2003, the survey said.

Cities whose residents saw property-tax increases in 2003 included Chanhassen, where the total tax bill rose from 46th to sixth with a 22 percent increase, and Hopkins, where the rankings in total taxes jumped from 39th to seventh with a 20 percent hike.

Less pain outstate

In 2002, homeowners across the state saw the benefits of a property-tax overhaul passed by the 2001 Legislature. Much of the cost of basic education, provided for through local property taxes, was being picked up by the state.

But the combination of rising home values and local tax-levy increases -- the latter brought on, in part, by state aid cuts -- has again sent taxes jumping in many communities.

For 32 communities outside the metro area, the league's survey found a slight average decrease in 2003 taxes for a hypothetical $100,000 home, a 0.7 percent drop from 2002. But a city-by-city breakdown showed that taxes increased in 13 of the communities, from a 0.2 percent hike in Willmar to 33.9 percent in Albert Lea.

In the metro area, residents of 63 of the 108 communities surveyed saw tax increases for a hypothetical $160,000 home, ranging from a 0.5 percent hike in Shakopee to 30 percent in Shorewood.

Last month the Star Tribune surveyed metro-area counties to learn where taxes were heading in 2004 in cities of more than 5,000 people. The findings showed the impact of a 2003 K-12 finance bill providing tax relief for less-wealthy communities that passed excess levies in 2002.

For example, median-valued homes in the parts of Brooklyn Center and Brooklyn Park that fell within Osseo School District boundaries will see tax decreases this year.

And in Brooklyn Park, even the citizens living within the Anoka-Hennepin School District can expect a tax savings, said Greg Andrews, the city's finance director. Anoka-Hennepin voters also passed an excess levy in 2002.

Andrews said the City Council made a conscious effort to avoid a tax increase on a median-valued home, raising city spending for this year by only 2.2 percent, from $27.5 million in 2003 to $28.1 million in 2004.

But in Hopkins, in the top seven of the Citizens League 2003 survey, there will be no break, at least according to earlier projections, which showed a median-valued home on track for another double-digit percentage hike in 2004.

Anthony Lonetree is at alonetree@startribune.com.



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