Property Taxes Up, Home Values Down For Some

By James Schugel, WCCO-TV

ST. PAUL (WCCO) — Homeowners might have had a little “sticker shock” when they opened up their tax bill for next year. The value of some homes might have gone down or just stayed the same, but taxes went up.

“It’s disappointing! We’re working hard. The economy’s bad. The value of our house has gone down, and everything’s going up,” said Teresa Kelly, a Hennepin County resident.

The overall value of properties has gone down, including the values of homes, apartments, businesses, and it’s happened for a variety of reasons. So, because of it, there’s a smaller tax base.

So, how does government make up that difference? Property taxes go up.

“Got to find a way to generate revenue. That’s why it’s happening,” said Gary Hosfield, a Hennepin County resident.

Homeowners really take the biggest part of the tax burden, more so than businesses, and that’s because of state law. So, in the end, they actually get stuck with a bigger bill than anyone else.

In fact, residents in Minneapolis used to pay 33 percent of the tax bill, but today it’s up to 56 percent.

Remember, home values haven’t decreased nearly as much as the value of commercial properties, again shifting the tax burden to residents.

Also, local governments are hurting. They’re just not getting as much money any more from the state, and it could get worse. There’s a $6 billion budget gap and it’s quite possible that lawmakers might cut even more state aid come January.

There is a statistic that really puts the importance of state aid into perspective. With the cuts at hand, property taxes foot almost the entire bill for public safety in Minneapolis, nearly 90 percent of what it takes to staff police officers, firefighters and other public safety officials.

And remember, homeowners’ property tax bill is really a collection of bills, including county, city, school districts and more.

Minneapolis is a good example of a city with its own big bills, including a city pension that’s under-funded. It’s a huge liability that city taxpayers are now having to pay for.

  • Matt Munson

    Totally the case out in Woodbury. Property taxes went up $200 and the house value went down $20,000. Sickening.

  • Tim Figge

    James: It was an interesting story, but 1/2 the important math is missing.. Many lenders have not winterizing their foreclosed properties for years. The water damage & black mold that can blossom in derelict buildings crushes the value of the building and those around the neighborhood,reducing property values tangentially.. Tax liabilities are not paid for years, reducing county cash flow. In Dakota County,on average, 200 homes per month are on the Sheriff’s foreclosure website. This translates into about $5-7ML in uncollected tax revenues until they sell each year. It’s worse in Ramsey & Hennepin county. In the best scenario 80% of the purchase money was provided by the lender perhaps that same percentage of property tax needs to be paid on property taxes into the county’s coffers in a more timely manner than is currently done. If the lenders had that much cash out on vagrant properties I’m certain the rest of the body politic would not be carrying so much of the increase in the tax burden. Additionally loan modifications would probably be spurred as well , reducing foreclosures,increasing property tax cash flows, and maintaining better curb appeal in the community, as opposed to plywood covered windows noe seen. In Eagan property values on some attached units, because of water/mold damage have gone from an estimated value of $124k last year to $65k this year to a projected $31k next year, all due to neglect.. This is a loss to both owner’$ equity and county dollar$. Finally, would it be ” A GOOD QUESTION” to ask why the mortgage insurance companies are not in the forefront of the news regarding massive pay-outs to the banks on this issue?..Tim..

  • Kyle

    It will only get worse with the GOP. They will cut taxes on their end, forcing local governments to make up the difference. In the end, they feel good, but your taxes still go up. Pass the Buck to the little guys.

  • Joe

    Plenty of money for state legislator and City Council salaries, though!

  • Jen

    So our property taxes continue to rise to cover the city’s employee pension funds, of which there are three, so that they when they retire, they can have a safety net and health coverage. Meanwhile, the average Minnesotan can’t even save for their own retirement, much less purchase health coverage, yet we’re expected to pay for all the city employees. Private sector workers have seen their 401k’s plummet in value. Maybe the city needs to tell it’s workers the honest truth in that the taxpayers cannot continue to make up the shortfall. Pension and retirement benefits of the past are no longer sustainable. It’s a new realty…all you have to do is look at what happened in the auto industry. We should not have to continue to foot the bill. The city needs to find another way to meet it’s pension obligations without doing it on the backs of homeowners.

    • Cindy

      I totally agree, but it is not only the city it is all government. The new reality does not cover these wonderful government workers wages (up from private wages) or pensions.

  • Maynard

    Hmm. I live in Dakota County. My taxes went down 2%, not as much as the 7.5% drop in value, but still down.

  • Aiden

    This is what we get after eight years of Pawlenty. Cut cut cut taxes at the top and pretend that debt will magically disappear, when in reality, it just gets passed on to local governments. Cut Local Government Aid… pass the buck to the local governments. After all this and Pawlenty is leaving office with a nearly $6 billion shortfall. Thanks for nothin’, Tim!

    • Rene

      I agree with you completely Aiden! this is how the GOP works. Pawlenty braggs he has not raised taxes, but forgets to mention he has forced local government to do so…but of course he says local gov. does not know how to budget. And what he has raised he calls it a “fee” and not a tax. It is all politics and to hell with the people.

  • Geoff

    My house value drop $50,000 (tax value) in the last few years but my taxes went up $500 dollars. Seems fair right. Not Thanks big government for all your help.

    Oakdale MN

  • hmm

    My house value went down $10,000 and taxes up $40 in Eagan.

    So when home values go up taxes skyrocket and when home values go down taxes still go up. Interesting how that works.

  • Sue

    Thanks to the Reps the rich get richer and the poor get poorer because we have to tax somebody and who gets burdened the most is the people that can’t afford it while the rich people sit back in their big houses and say thank-you to the Reps.
    We should all protest and show up at the Hennepin County tax meeting and complain about how they can keep raising our taxes while our house value keeps falling, if they keep that up we will have more foreclosed homes than ever before.

  • Steve

    Why should we pay off the Target Center(TIF)-its basically a business. Now is when we need the T-Party more than ever.

  • WJ

    All I ever hear is we need to tax the rich. Well the rich pay about 62% of the taxes the poor pay about 2.3% and the Middle make up the rest. You start raising taxes on the rich, they then don’t expand their business to hire more employees, or invest in new technology etc. The Big Goverment needs to cut programs that are not cost effective or move them to the private industries. The Goverment does follow the same accounting rules that private or public companies do. These companies have to monitor cost and bring in revenue in order to stay in business. The Goverment has in their mid unlimited funds and don’t monitor costs the same way a private/public corporation does.

  • Rob Wagner

    Rene and Aiden, Good luck when Dayton gets in. He’ll fix every thing. Go hug a tree.


    So is the answer to tax corporations? So they can move out of state to states that have more attractive corporate tax rates? Lockheed Martin and Ford. Now we have more unemployed who can’t make their house payments, and more forclosures, and even less taxes coming in. There is no easy answer and there is no one group to blame or one that can easily solve this crisis. Its going to be a long painful road ahead people.

  • Paul Daniele

    I totally agree with Tim with lenders not winterizing the foreclosed home, which leads to pipe breaks and the possibility of mold growth

    The Flood Doctor

  • S R

    So Rob Wagner, are we to believe that the last 8 years were a happy go lucky walk in the park? I understand being upset with peoples comments about a person you may or may not have voted for, but still find it funny that you would attack the views on an editorial page. The comments made are opinions and of course yours are not going to be the same as all the others. The views that Pawlenty has been hurting the tax payers in this state are not a myth and all you need to do is look into this and find that this is correct. Pawlenty was making people pay more money on “fees” and coming out saying he would not raise taxes. This is a repeat of most of the GOP’s strategy. They said nothing about it being a better place when Dayton enters office (if he will) and were just talking about what has happened in the past. If you are going to attack a person’s comments, please make sure you attack the comments made and not what you think they may be implying.

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