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Yes, you will have to pony up more

By Staff | Dec 13, 2015

I know, I know.

We write all these stories about budgets and levies and what cities and school boards and the county board are planning to do about raising your property tax levy. And it seems pretty confusing.

It starts back in September when the elected officials set their preliminary levy amounts and we report that number. But, they are going to set that “real,” final levy in December, so some folks say that first number really doesn’t matter.

Or does it?

Because the councils, boards and commissioners cannot raise that first September number later, only leave it the same or lower it come December, that first levy increase number can give the taxpayers a little “sticker shock.”

We report those first numbers for that very reason. Local residents need to know just what their elected officials are doing. Those officials also want us to report that this is a preliminary number and they have every intention of lowering it in many cases.

But, they don’t have to.

The School Board is pretty honest and doesn’t really have a solid number because their budget and levy is a complicated series of formulas that is determined by the state. So the school usually sets their preliminary number at “the maximum amount allowed,” while not really knowing what that final max amount will be.

They rarely, if ever, lower it later.

Councils and commissioners have to work to lower the number, but they also have to agree among themselves what that number should be. Some may want to lower it, but do all of them?

Of course, we report on all this work of trying to lower the budget – and thus also the levy amount – between September and December.

In the case of the city of Wells, the levy increase started at over 40 percent, then was lowered to 18 percent and ended up at 10.

Some of that was due to pressure from local taxpayers. And, of course, those citizens had read about the proposed increase in the newspapers.

That’s why we do so many stories on this topic. The people need to know.

The bottom line, however, is that what local residents really want to know is the answer to that final question. Just what does all this mean to me? How much are my own taxes going to go up?

That answer is not all that easy.

A year or two ago, one reader of the Faribault County Register cornered me one day and said, “You know, Mr. Editor, you write all this about our property tax going up, but when I got my final tax statement, my total had actually gone down a little. How’s that possible?”

I didn’t know the answer.

Property taxes depend on the valuation of the property, property tax shifts from the state (do homeowners, business building owners or farmers pay more, or less), and several other factors.

One is changes to the property tax base.

In the case of Blue Earth, the City Council points out that their nine percent increase in the levy will only have about a three percent actual increase in local property owners taxes. That is because the property tax base the total value of all the property in the city increased by six percent. So, there was more property to spread the increase over.

Got it?

Well, maybe. Or maybe not. It means we have more property to share in paying the amount needed to run the city. So the amount you need to pay will be a little less.

And, that can be a significant factor to local property owning taxpayers, especially those on fixed or limited incomes. Many senior citizens can’t absorb too many increases in expenses to their budgets. Property tax increases can hit them hard.

The real bottom line is that if your School Board, City Council and County Board all decided they needed more money and bumped up their tax levy amounts, it is pretty certain your property taxes are going up. We all now await that final tax statement from the county to find out just exactly what that amount is going to be for all of us.

And, one final note to all these public bodies.

You want more of my dollars next year. That’s OK. Just, please, spend them wisely.