Property taxes going up, or down?
They say there are only two things in this life that are certain. Death and taxes.
We are all going to die some day. And, unless we are a hermit living in the woods somewhere, we are all going to pay taxes.
In some states, we might even pay a death tax. I guess you could call that a double whammy, or adding insult to injury.
We pay state and federal income taxes, where we pay as we earn. Although some states, like our neighbors in South Dakota, don’t have a state income tax. Generally, these taxes are deducted from our wages, a little at a time.
There are state sales taxes, where we pay as we buy things. And, probably, by next year sometime, we will pay a little extra for things we purchase in Blue Earth as the city plans to implement a half of one percent local sales tax. We did get to vote on whether we wanted that to happen or not, and we said yes.
We pay a gas tax, where we sort of pay as we drive. Some of that money comes back to us in the form of better highways and bridges in Faribault County. We pay as we fly on airlines, and that money can come back to our local airports. We pay as we sleep in hotels and motels. You know, it is where you thought the room rate was $85, but in the morning your bill is for $98 after the lodging taxes have been added. Locally some of that tax money comes to the Blue Earth Convention and Visitors Bureau, and they use the funds to promote local tourism, among other things.
You get the point. We pay a lot of taxes.
Then there are property taxes, where you pay on land, buildings and homes that you own. And, while we understand how all the other taxes are figured, property taxes are probably the most confusing ones of the bunch. “Just how much are my property taxes going to be next year and why?” is a question many folks ask and don’t get an answer to until the final tax statement comes in the mail.
Although I am not an expert, I will try and explain it the best I can.
Several factors come in to play for your property taxes.
Local governmental bodies determine how much money they will need to operate in the next year. County boards, school boards, cities, towns and townships set their budgets. The budgets include expense estimates and where the money to operate will come from. In some cases, a big chunk is from the state in the form of local governmental aid. But, another big chunk comes from us, local property owners.
That local levy amount is divvied up among all of us, according to how much the county says our property is worth. The more our property is worth, the more we pay. If there is new construction in our area, we could pay less as the total property tax needed is spread out to more people.
The amount of tax you will pay also depends on the value of your property, and the amount your local governments need to operate. They raise their budgets, your taxes will probably go up. They raise the value of your home or land, taxes will increase. Probably.
Complicating the formula even more is the fact that governmental bodies must determine a preliminary budget and levy increase in September and send that out to every property owner. Unfortunately, that number is rarely what your final bill will be. In December they set final budgets and levies and then in April you will get your final tax amount.
Confused? Me too.
In Blue Earth this year, property taxes have changed dramatically for some folks. The county assessor changed the value of many homes, either up or down. Older homes, under $100,000, were decreased in value, meaning less tax, as much as 30 percent lower. Other houses were given higher values and thus owners are seeing a dramatic increase in their property taxes.
Other factors also enter into the formula for property taxes. People who live in an area where there was a street and utility project have assessments added to their tax. If a school passes an excess levy referendum, and many of them do, that will add an amount to your tax.
So how much are your property taxes going to be in 2019? That is a darn good question. I guess we will just have to wait until after the first of the year when we get that final notification.
No matter how high our property tax statement is, just try to remember that it could be worse. If you lived in Minneapolis, for instance. Or worse, in places like San Francisco or New York City.
My property taxes in good old Blue Earth, are reasonable and modest by comparison.
It is one more reason why we live here.