More than 70 percent of all St. Paul homeowners will get at least a small tax break this year. And even as property values begin to pick up, the average savings will be $100.
Increases in state aid to cities and counties account for part of the property tax relief, but homeowners also can thank owners of properties that are gaining value faster, such as apartment buildings and commercial buildings.
In St. Paul’s Highland Park neighborhood, which was hit hard by back-to-back tax increases throughout the recession even as property values slid, the owner of a median value $235,200 home can expect to see about $200 or more shaved off his or her property taxes this year.
“In general, I think people are pretty happy to be getting some property tax relief, which stems from us getting some relief from the state of Minnesota,” said Ellen Biales, a legislative aide to city council president Kathy Lantry. “It makes a difference.”
St. Paul, Ramsey County and the St. Paul Public Schools all benefit this year from an increase in fiscal disparities money, a metrowide property tax redistribution tool that helps ease tax burden for worse-off communities.
Tax relief comes at a cost. John Slade, a community organizing and grant writing consultant who lives in Dayton’s Bluff, said the city has weathered difficult cuts to its recreation centers, among other tough budget choices. Flat city and county tax levies are easing the burden for many homeowners, but it follows cuts to youth programming and other services that could benefit poor families.
“St. Paul is back to a level of local government aid that’s at a somewhat reasonable level,” said Slade, “(but) the economic recovery is spreading inequitably. … The middle class is feeling a little bit better, but the average working class and poor St. Paulite is still feeling uncertain in their jobs.”
Meanwhile, apartment buildings have picked up in value amid a tight rental market, and apartment owners are seeing a median tax increase of about $60 for all apartments, or $1,925 for larger buildings.
Tax increases will be modest for the city’s business owners this year. The typical commercial property will pay one-fifth of 1 percent more in property taxes than last year, or about a $6 increase.
Savings for homeowners are being offset, at least in part, by special assessments for right-of-way maintenance, storm sewers and expanded recycling options.
Homeowners seeking to contest their property’s valuation should call the Ramsey County Assessor at 651-266-2131. Homeowners can also attend market value review meetings, which began Monday. They were scheduled from 10 a.m. to 7 p.m. Monday and 8:30 a.m. to 4 p.m. Tuesday at 90 West Plato Boulevard in St. Paul.
Beyond that, formal appeals to the County Board of Appeal and Equalization must be postmarked by May 2.
Property tax statements were mailed March 19 by Ramsey County and included value notices for 2015.
Here’s a quick look at a typical homeowner’s tax statement for an 1,100-square-foot homestead property in St. Paul’s Hamline-Midway neighborhood. The home’s estimated market value was $141,200 in 2013, which grew to $141,800 this year:
In 2015, the county estimates, the house’s market value will be $152,800, a sizable increase after a $20,000 drop in home value from 2012.
“There are actually a number of properties that are seeing value increases, and in some cases, significant increases,” said Chris Samuel, Ramsey County’s manager of property tax.
Assessors base home values in large part on comparable sales in the same neighborhood. As a result, many homeowners will see value increases in the range of 10 percent to 20 percent, Samuel said.
For the Hamline-Midway example homeowner, taxes payable next year will be based on this 2015 value, after a $23,500 reduction for the state’s homestead exclusion program, bringing the taxable market value down to $129,300. The exclusion is $1,000 smaller than the year prior. “As market values go up, the exclusion goes down,” Samuel said.
The homeowner would have paid $2,171 in city, county and school district taxes in 2013, including payments for special taxing districts such as the Metropolitan Council and the Metropolitan Mosquito Control. This year, he or she will pay $2,112, for a total savings of $59, or 2.7 percent.
Citywide, the average savings on all residential properties, excluding apartments above three units, is 4.5 percent, Samuel said.
Where did those savings come from? In this particular homeowner’s case:
— Ramsey County’s share of the total dropped about $18. The county takes in $10 less for its general levy, and the county’s Regional Railroad Authority takes in $3 less.
— The county’s public safety radio system charged the homeowner $4.67 in 2013 and nothing this year. “That debt is now paid, so we would not expect to see an amount on that line going forward,” Samuel said.
— The St. Paul city levy accounted for $554 in 2013 and $540 this year, a savings of $14, or 2.5 percent for this homeowner.
— The St. Paul Public Schools’ local levy and voter-approved levy brought in $770 in 2013 and $742 this year. The amount of money paid to special taxing districts dropped by $1.
Nevertheless, this homeowner’s $59 in savings is being offset in part by an $18 increase in special assessments. The recycling fee, for example, will rise from $38 to $52 this year to the city pushes to collect more items under single-sort collections.
A savvy homeowner, though, can reduce those charges by paying street and sewer maintenance when they’re billed in the fall, instead of waiting until tax time and footing the bill for interest.
Frederick Melo can be reached at 651-228-2172.
Follow him at twitter.com/FrederickMelo.
LOOK IT UP
— Your Ramsey County property tax statement: co.ramsey.mn.us/prr
— Your St. Paul street assessment: StPaul.gov/assessments