The average St. Paul homeowner can expect to pay $36 more in property taxes next year as modest increases in local tax levies offset a big jump in home values.
City and county officials have opted not to raise taxes next year, acknowledging families are struggling amid the coronavirus pandemic. Both bodies will keep many open positions unfilled in order to hold down spending.
The St. Paul school board, however, adopted a 5 percent levy increase without comment Monday evening.
That figure is the maximum allowed under a state formula. The district typically levies the maximum each year.
Officials gave no reasoning for doing so again this year, but school district lobbyist Mary Gilbert said during a Monday morning meeting of the local Joint Property Tax Advisory Committee (JPTAC) that they worry about a decline in state funding.
The state is projecting a $2.426 billion deficit for the current two-year budget cycle. And the district has seen enrollment drop more than 6 percent since last fall, which will cost them many millions in per-student funding.
At about 22 percent of the district’s total yearly revenue, next year’s property tax levy will generate $197 million to be spent on building renovations, general operations, retiree benefits and community service programs. Around $54 million of that comes from a referendum that voters agreed to increase in 2018.
LEVY IMPACT
Home values in St. Paul increased 8.6 percent compared to last year, according to information presented at Monday’s JPTAC meeting.
Chris Samuel, Ramsey County auditor/treasurer, said those values were set in January, two months before the pandemic, but the residential real estate market hasn’t changed much since.
“We continue to see strong market value growth because of high demand, low supply,” he said, adding that there’s uncertainty regarding commercial values with people increasingly working from home.
For a median-value home, now worth $215,800, city taxes will fall by $19, county $3 and other special taxing districts $2.
But the schools portion is slated to rise by $55 and the regional rail levy — set by the county board — will increase $5, for a net increase of $36, or 1.2 percent, over this year.
The owner of the average apartment building, meanwhile, will pay 7.5 percent more next year, while commercial properties will see their tax bill shrink by about 0.5 percent.
Taxpayers will get tax notices in the mail in mid-November.
DEBT TARGET
JPTAC members, who includes representatives of the city, county and school district, observed Monday that their collective debt is higher than they’d like.
Although bond ratings are strong for all three bodies, general obligation debt this year passed the group’s target of $2,500 per resident, and it’s on track to pass $3,000 within four years.
“It feels like something we should address as a group,” said Alexandra Kotze, the county’s chief financial officer.
Driving that rising debt is the school district’s campaign since 2016 to improve the look and function of its schools citywide.
Marie Schrul, chief financial officer for the school district, said the organization is developing a new five-year facilities master plan, and it’s worth looking at debt along with student enrollment trends and the district’s strategic priorities.
“I think it is critical to look at the future debt and also be mindful that we’re investing in the school district and the buildings and continuing to plan for that future for our students,” she said.