This year, Minnesotans were hit with an extra $1 billion ($164 per person) in property taxes, and it looks like they will take another big hit in 2027.
Dakota County
Last week, KSTP reported that:
Dakota County leaders are now mulling over the property tax rate for next year.
An internal budget presentation obtained by 5 EYEWITNESS NEWS shows four scenarios.
One is upwards of 29% — a $255 hike for a median home here, worth about $400,000.
The good news?
Those numbers are already dropping.
“We start with here’s a projection of what we think when we started in February,” explains County Manager Heidi Welsch. “So as the year goes on, we get better and better data, gets closer and closer.”
Welsch is predicting a rate somewhere between 14% and 24%.
That lower number is estimated to cost a median-priced home an increase of $111.
An 18% to 19% rate could mean a $145 increase.
“It’s going to be hard for taxpayers, no matter what happens here, because it’s a big jump,” Welsch notes.
…
“It’s major cuts to the libraries and pretty substantial cuts to the parks, cuts to social services, if we don’t raise taxes enough,” [Welsch] declares.
Welsch estimates a bit less than 100 positions could be cut.
Washington County
Also last week, KSTP reported that:
Washington County leaders are weighing a property tax levy increase that could raise the average household tax bill by a little more than $60 a year.
Blaine
Earlier this week, KSTP reported that:
Blaine leaders are weighing a property tax increase as the fast-growing suburb says it needs more money to keep up with growth.
The Blaine City Council has a Monday evening meeting where they will discuss a potential 8.9% tax increase.
…
Blaine’s official tax levy increase is not expected to be voted on until December. If approved at the current level, it would add $120 a year for the average household in Blaine.
St. Paul
Last week, KSTP reported that:
St. Paul Mayor Kaohly Her shared a vision for the future on Thursday as the city weighs cuts and higher taxes to resolve a $26 million budget deficit.
In her 2027 city budget address, proposed a 6.8% levy increase (property tax), which the mayor’s office says would equal a roughly $58 annual increase for the median St. Paul home.
Her’s office says her proposal also cuts spending by $11.3 million to help address the city’s deficit. A hiring freeze is also a possibility for St. Paul.
Her’s office says her proposal also cuts spending by $11.3 million to help address the city’s deficit. A hiring freeze is also a possibility for St. Paul.
Minneapolis
Last Wednesday, Minneapolis Mayor Jacob Frey unveiled his proposed 2027 budget. It would, the Star Tribune reports, “require a 11.3% increase in the city’s property tax levy, the elimination of 100 positions and the consolidation of several departments.” These measures “are needed to close a $32 million budget gap driven by increasing personnel costs and flat or declining revenue,” The Star Tribune explains.
The property tax hike would mean the owner of a median-valued Minneapolis home, worth $351,400, will pay $409 more a year” and would be “the biggest levy increase since at least 2000,” even though “The property tax levy has gone up an average of 7.7% a year since 2018.”
It is never enough
Since 2018, house prices in Minneapolis have risen at an average annual rate of 5.4%; median household income in Hennepin County by 3.9%; and consumer prices in the Twin Cities by 3.3%, as Figure 1 shows. The city’s government spending is slowly swallowing up the incomes of its residents. Similar things are happening across Minnesota.
Figure 1: Average annual rate of increase since 2018
As I have written before, the spending is the problem. To solve the problem, we need to get this spending under control by capping the rate of growth of government spending.
This is a major and growing problem for Minnesotans. It demands a real solution, and our Affordability Agenda provides that.