Taxing Developments

Truth in Taxation hearings, for some, is akin to sitting at home and watching paint dry. For others, it's an opportunity to present some serious and real concerns to our elected officials.

City and County elected officials had back to back "T in T" hearings last week. Some of the same folks attended each of the meetings sharing the common theme: "Show some fiscal restraint on next year's budget." It was the rallying cry of most. A couple of folks actually yelled and swore.

Interesting how the Minnesota system is set up to deal with property valuations in the Spring (April and May were those hearings) and the proposed levy (property taxes) in the Winter (December). Both are interrelated as property values are what the levies are based upon. Unfortunately, many of us learned too late that if we had concerns about valuation increases, that we should have come before our elected officials back in May.

Adding to the levels of frustrations were the "T in T" statements that had been sent out near the end of November. Those were based upon budget guestimates that City, County, and School District administrators had put together months ago. Basically they were crystal ball forecasts for a budget yet to be developed. As such, the administrators were somewhat guarded and had budgeted for more than they probably had needed. The interesting thing about this process is that the various districts can not ask for more tax levies than in these initial requests, but they can ask for less, which will ultimately be the case.

The outcry then erupted when folks received their "T in T" statements a few weeks ago that showed valuation increases, some as much as 70% or more! Adding to the concern was the double digit proposed increase of property taxes over what was paid last year. Couple that with declining markets, a skittish national economy, and you get some pretty frustrated tax payers.

Particularly onerous was the "hit" that commercial property tax owners took with an across the board 15% increase in property values. When asked why, administrators at the County and City both replied that the increases were mandated by the State based on commercial property sales that had taken place the year before. By some accounts, that amounted to only 4 or 5 sales. It's not clear if the State actually mandated these increases, or some over zealous local official jumped the gun on the state's behalf.

Still a couple of "T in T" hearings yet to go. Ultimately, budget restraint will prevail, and levy increases will see minimal increases. If that were the only issue.

From my seat Commercial property owners have been asked to pay a disproportionate portion of any budget and therefore levy increases. The 15% increase in commercial property values was a bit sneaky and premature from what I can tell.

That's my opinion. What about yours?