Monday, September 22, 2014

Navigating the property tax system in Minnesota (No. 1) -- FAQs

To help state residents better understand the local property tax system in Minnesota, the League of Minnesota Cities has published answers to some of the most frequently asked questions about how the system works.

What makes my property tax bill change from year to year? Is it...
a. My property’s value?
b. My neighbor’s property value?
c. My city council, my county board, and my school board?
d. The state Legislature?
e. All of the above?

The answer is E—all of the above. The decisions of your city council, county board, and school board about the amount of tax dollars they need to deliver services may be the most obvious factor in your property tax bill. But the value of your property, the total value of all the property in your community, changes in state programs, and changes in state laws that affect the tax system also play a role. Changes in any of these factors can make your tax bill go up in some years and down in others. 

Some of the local news coverage talks about city budgets and other coverage talks about city levies. Are they the same thing?
The property tax levy is the amount of money that the city (or other local government) decides it needs to collect from property owners in order to deliver services. Property taxes, however, are just part of the overall city budget. The budget includes both discretionary spending (for services the city is free to choose to provide) and non-discretionary spending (to meet obligations such as paying off debt). The budget includes all the dollars that the city collects from various sources—fees, grants, revenue sharing, and property taxes. 

This post is the first of a series. Click here to see the complete FAQ document (PDF file).