Sunday, February 13, 2011

While increases in the amount of property taxes a homeowner must pay can be attributed to either a rise in tax rates or increases in property values, the abysmal level of home values in this economic climate clearly show that the higher amount of property taxes that Minneapolis homeowners must pay this year are due to an increase in the rate of taxation –a whopping 6.5% increase in property tax rates. Where will most of this tax revenue go? Pension funds, with the largest recipients being the Minneapolis Police Relief Association, the Minneapolis Fire Relief Association and the Minneapolis Employees Retirement Fund. This puts Minneapolis as the second highest for property tax increases in the state, though still behind Rochester, whose residents will see an 8.4% increase this year. The chart below shows the highest city levy increases in Minnesota cities with over 50K population this year:

Our readings for this week mention that many states require truth-in-taxation procedures when there are increases in the amount of property taxes that citizens must pay – whether due to an increase in property values or changes in the tax rates (pg 324). So were Minneapolis residents forewarned or allowed to weigh in about the proposed property tax rates? Yep. The state of Minnesota, through Minnesota’s Truth in Taxation policy, requires that local government entities provide public advertisements on the budget/levy of certain taxing jurisdictions, parcel-specific notices sent to the owner of the property, public hearings and changes in the property tax statement when such increases occur. Here is the truth in taxation bulletin from the City of Minneapolis concerning the increase.

A public hearing was also held in November 2010 in regards to the tax hike, though I couldn’t find any minutes from the meeting. I was however able to find minutes from a Truth-In-Taxation hearing in Nobles County (MN), showing that there weren’t any citizens present at the meeting. I wonder if the Minneapolis hearing was any different.

As a Minneapolis homeowner, I wanted to know which county had the lowest tax rate…turns out that Dakota County has the lowest county property tax rate in the Twin Cities metro area and the state in general. See the chart below for comparisons with other counties in the Twin Cities metro area, and here for information on how it is the lowest in the state. Despite these tax increases, I still value access to public transportation, walkability, the arts, events and city-life too much to "vote with my feet" and leave Minnapolis/Hennepin least for now!


  1. In answer to your question about citizens attending TNT hearings - I went to the hearing in St. Paul in early December, and there were very few participants. I heard that the St. Paul Public Schools and Ramsey County hearings were much more highly attended. Maybe this indicates that citizens were aware of the different levels of levy increase (for example, St. Paul proposed a 0% levy increase while the county and school district proposed increases to their levies), or maybe it indicates that citizens are overwhelmed with the many different hearings and options for providing feedback and input.

  2. The professional terminology used in the hearings might scare some people too.