Tax notices bring pain for some, relief for others

ST. PAUL, Minn. -- It's that time of year again when Minnesota homeowners receive that annual love letter from their county tax offices, a sneak peek into next year's property tax bill.

Those proposed tax notices began arriving in mail boxes this week, bringing pain to some and relief to others.  And even if your property values fell, it won't necessarily translate to lower taxes.

"We noticed our home value went down, but our taxes are still going up by 2.6 percent," Saint Paul resident Roy Otto told KARE Thursday, "Overall it's not bad, but it's still surprising in this market."

That sagging housing market led Ramsey County to lower the assessed valuation of Otto's three-bedroom stucco home in the Mac-Groveland neighborhood by $35,000 compared to last year. But the tax bill, if it becomes reality, will set a new milestone.

"For the first time since we've lived here it has popped over $6,000," Otto said as he looked over the notice, "From $5,936 to $6,054."

The letters, dubbed Truth-in-Taxation notices, combine the projected levies from all the taxing entities with a stake in your property. In Otto's case that includes Ramsey County, Regional Rail Authority, the City of Saint Paul, Saint Paul Schools and the Metropolitan Council.

The statements also list upcoming hearings where citizens can testify about local government budgets, as well as instructions for appealing the county's opinion of your home's market value.

What's truly remarkable to Otto is the comparison between 2010's tax tab and 50 years ago, when he bought his first home.

"In 1960 when I bought my first home as a 21-year-old my mortgage payment for $89 a month," he said, "And now my taxes are $500 a month!"

The Ramsey County's Property Tax Records and Revenues office has been flooded with phone calls this week with taxpayers shocked by their tax notices, according to tax accounting supervisor Dick Sivanich.

"That's the most common question we're getting from homeowners," Sivanich told KARE, "How can my property value be dropping but my taxes stay the same or go up?"

The answers are complicated. It varies from home to home, from neighborhood to neighborhood, and it's a snap shot of conditions as of January 2009.

"It's a year behind and in some cases market values are actually better now than they were, and in others they won't be," Sivanich said.

"I feel bad for those who call to say they've lost their jobs, or are struggling financially, but I often have to remind people property taxes is one of those things that has never been based on ability to pay."

Many school districts and localities have made cutbacks, found cost savings and laid off staff but are still forced to tap more deeply into the property tax well, especially as other sources of revenue -- including state aid -- have diminished.

But the case against raising taxes can easily fit on a bumper sticker or a billboard. Local government agencies have become more assertive in recent years when it comes to explaining how those tax dollars are used.

As part of that effort the League of Minnesota Cities, Association of Minnesota Counties and the Minnesota School Boards Association jointly produced a 10-minute web video entitled "14 Reasons Property Taxes Can Go Up or Down."

Roy Otto said he feels for those who will have a hard time absorbing the increase in taxes, especially in this economy. At the same time he's still happy with how the City of Saint Paul is being run.

"I really enjoy living in Saint Paul," he said, "I like the commmunity feeling here, even though it's a good size city."

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