Tuesday, September 22, 2009

14 reasons why property taxes go up or down from year to year
As cities work through the processes of setting levies and planning budgets for 2010, homeowners are likely wondering what those processes will mean for next year's property taxes. A couple of years ago, the Association of Minnesota Counties, Minnesota School Boards Association, and League of Minnesota Cities partnered to produce a short video and informational brochure describing the reasons why the amount you pay for property taxes is different each year. A summary of those reasons is listed below. A copy of the video may also be found on the City of St. Paul's web site.

1. The market value of a property may change.
2. The market value of other properties in your taxing district may change, shifting taxes from one property to another.
3. The state general property tax may change.
4. The city budget and levy may change.
5. The township budget and levy may change.
6. The county budget and levy may change.
7. The school district's budget and levy may change.
8. A special district's budget and levy may change.
9. Special assessments may be added to your property tax bill.
10. Voters may have approved a school, city/township, county, or special district referendum.
11. Federal and state mandates may have changed.
12. Aid and revenue from the state and federal governments may have changed.
13. The state legislature may have changed the portion of the tax base paid by different types of properties.
14. Other state law changes may adjust the tax base.

Reason #12, of course, has special significance this year (and, perhaps, for years to come) in light of the Governor's recent unallotment of local government aid payments and market value homestead credits, affecting the vast majority of Minnesota city budgets. That unfortunate decision has already been responsible for proposed property tax increases and significant service cuts in several Minnesota cities for 2010.

Does all of this sound complicated? It is, but there are additional resources here, here, and here for those wanting to learn more about Minnesota's property tax system.