Proposed 2010 property taxes up 3.5 percent statewide

Property tax levies will increase an average of 3.5 percent statewide if proposed local tax levies are adopted later this year, the Minnesota Department of Revenue said Thursday. This compares to last year’s increase of 5.6 percent and an average increase of 6.9 percent during the past three years.

Hutchinson is proposing a 5-percent levy increase for 2010 that would equal a $17 increase on a home valued at $140,000. The statewide average for cities is 5.4 percent. McLeod County has been considering a 2.95-percent increase, while the statewide average is 3.2 percent., Hutchinson School District 423 is proposing an increase of 3.66 percent, compared to the statewide average of 3.2 percent.

The proposed increase is based on maximum levy amounts proposed by local governments in advance of annual Truth-in-Taxation hearings, which begin next week. If those hearings result in a decrease in proposed levies, the projected growth will be even smaller.

“Minnesota’s property tax cap, combined with the impact of the global recession, has kept levy increases relatively modest,” said Minnesota Revenue Commissioner Ward Einess. “It’s clear that the property tax cap has imposed some fiscal discipline on local government spending, even after many jurisdictions experienced reductions in local government aid this year.”

The property tax cap proposed and signed into law by Governor Pawlenty in 2008 limits property tax increases by counties and cities with populations over 2,500 to the lesser of inflation or 3.9 percent. This year, the cap is 0.8 percent. Special levies for debt, public safety and certain other costs are not subject to the cap.

“Taxpayers can further influence local decisions about their property taxes by attending their Truth-in-Taxation hearings,” Einess added.

If the proposed levies were approved, local property taxes would increase in 2010 by $272 million statewide.