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Many variables affect whether local taxes will go up or down

From the Editor's Notebook

December 7, 2009
by Chuck Hunt, Register Editor
Like most other property owners in Faribault County, I received my proposed property tax bill for 2010 in the mail the other day.

The notice has information pertaining to what taxes a property owner will pay next year.

But, how accurate is the information you received last week?

My notice shows I will pay less in property taxes next year than this current year. It shows the county’s amount decreasing by five dollars. The City of Blue Earth’s tax portion is shown increasing by nearly $80 on my statement. The school tax, however, goes down by $120, resulting in an overall reduction.

Or does it?

In the fine print above the school levy numbers is a note that if the special levy referendum vote passed in November, these numbers will change.

Well, the vote did pass, so the special levy amount from 2009 will be back up for 2010. County Auditor John Thompson says the 2010 amount for each property should be similar to what was paid in the past.

On the other hand, the city’s amount of tax will more than likely go down.

The amount on the statement that you received reflects the council’s November proposal to raise the levy by 12 percent.

However, the council has been working on budget cuts that would reduce the levy increase to three percent. The city amount should go down significantly.

So, when you get your actual tax bill in the spring, it will more than likely be different than what you received in the mail last week.

A good guess is that the County Board will leave their proposed increase the same, at 4.1 percent. The City of Blue Earth – and the City of Winnebago – will probably lower their amounts first proposed last month.

And, the school amount is going to back up to near what it was last year.

My proposed property tax bill shows a reduction in the total tax from last year of five percent. More than likely, my actual tax bill will show an increase next year.

Confused yet?

The next question is, why does the county send out these tax proposal notices if they don’t reflect what is actually going to happen.

The answer, of course, is that it is something that is state-mandated. And, in theory it is a good idea. People do need to be informed what their local governments are doing and how those activities will affect local taxes.

In reality, it sometimes confuses the issue more than it clarifies it.

Cities, counties and schools are forced to make a determination on their next year’s budget and levy months before they actually set the final amount. The first number has to be done in November, and it can- not be raised later – although it can be lowered.

So, most entities set a large number for the increase, then back it down later. The problem arises when the county has to send out the proposed tax notice before that final number is arrived at by the government units.

Auditor Thompson admits it is a strange way of doing things, and says he gets calls every year from confused taxpayers.

People need to realize this notice is just a list of the proposed tax amounts, he says.

There is another function performed by the statements, Thompson points out.

A list of the official Budget and Tax Hearings for the taxing bodies is included. Residents are notified when and where the so-called ‘Truth and Taxation’ meetings will be held.

It is a chance for taxpayers to come and hear reports on the proposed 2010 budgets, and the reasons for raising the tax levy for the next year.

Hopefully, the citizens who do attend will hear a more updated version of what is actually going to happen.

In Blue Earth, for instance, residents who question why the city’s tax is going up so much will find out it might not be raised as much as the statement says.

At last year’s budget and tax meeting in Blue Earth, one citizen questioned why his city tax was decreasing. He requested the city at least keep it the same, and thus prevent cuts to city services.

I would bet that doesn’t happen in every city in Minnesota – someone complaining because their taxes went down.
 
 

 

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