Property tax increases give Minnesota homeowners sticker shock

HENNEPIN CO. (FOX 9) - Homeowners across Minnesota started getting their property tax assessments this week, but some are also getting sticker shock when they open their mailbox.

Taxes rising

The city of Minneapolis proposed the largest property tax hike in 16 years, 8.1%, while the school board passed a maximum levy of 4.5%.

That's in addition to a separate $20 million school technology levy which voters approved.

St Paul and its school board also set maximum levy increases of 7.9%.

Add in county and park board levies and some homeowners are seeing double-digit increases.

"It's actually not even just Minneapolis and St Paul. I think we're finding that cities across the metro area, across the state are going to see this as well," said Andrew Babula, the director of the real estate program at the University of St Thomas.

He says property taxes are going up because rising labor costs have made it more expensive for cities to provide services like street repair and public safety.

Some municipalities have also extended the number of services they provide, like investing in housing or revitalizing their downtown.

"The wages of city employees, which is good for city employees, but also then is bad for the taxpayers," said Babula.

Babula says the falling value of downtown office buildings as more people work from home has shifted more of the city's financial burden from commercial building owners to homeowners, but inflation is the major contributor to the property tax hikes.

"Cities are in a tough spot because they've got to provide the services. They don't want to raise taxes either, so they've got tough decisions to make," said Babula.