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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.

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