REGIONAL- Inflation is putting the pinch on St. Louis County government, and the proposed 2023 maximum tax levy is going up by over four percent in part to compensate, but significant growth in the county’s tax base will shield many property owners from an increase in what they actually pay.
The St. Louis County Board on Tuesday unanimously approved a levy in the amount of $163,366,729, a 4.39 percent increase over this year.
“We, like everyone, are experiencing the significant impacts of inflation and increased costs driven by supply chain challenges. Fuel costs alone have increased by more than 50 percent, which is particularly significant when you remember our Public Works and Sheriff’s Office vehicles cover our 7,000 square mile county,” said County Administrator Kevin Gray.
“Even just a few months ago, we were facing the need to increase the levy by much more, because we don’t have the option to cut back on the majority of services we provide,” Gray continued. “So, I am very appreciative of the hard work of our staff and the leadership from our commissioners to trim costs and find other revenue sources, because we are all aware our citizens and business owners are feeling similar impacts.”
The net tax capacity in St. Louis County grew by an estimated 17 percent in the last year, and typically, this would mean a decrease in the percentage of the levy each property owner must pay. However, this year, some of that growth is attributed to the increase in residential property values that resulted from the busy real estate market, so the effects will vary depending on the property’s classification, overall value, and how much the value increased.
It’s estimated the owner of a home valued at $250,000 would pay approximately $185 dollars less in 2023 on the county portion of their property taxes compared to this year if the value of their home remained the same. Meanwhile, commercial properties saw less overall growth in valuations and thus will see even less impact on their county property taxes.
Commissioner Keith Nelson, who chairs the Board’s Finance Committee, said, “While any increase in the levy concerns me, this number is reasonable, responsible and reflective of the times in which we live. Our state partners have failed county government and the communities that we serve by failing to pass a tax bill and a bonding bill. Despite a $9 billion surplus, they’ve left local government units to contend with the budgetary challenges.”
According to a county press release, the proposed 2023 levy will absorb increased cost pressures from inflation, fund employee salary and benefits commitments, sustain investments in mental health and substance use disorder services, invest in enhanced medical services at the county jail, provide for technology, including cyber security, and supports economic development efforts. It also incorporates targeted uses of reserves and American Rescue Plan Act (ARPA) monies.
Minnesota counties are required by law to set their maximum property tax levy - that portion of the budget collected through property taxes - by the end of September. A final vote on the proposed maximum levy will take place Sept. 27. Over the next few months, the levy amount may be reduced, but it cannot increase. Commissioners will vote on the final capital and operating budget on Dec. 13.
Two meetings have been set to collect public input on the levy and budget. They will be on Monday, Nov. 21 at the St. Louis County Courthouse in Virginia, and the following Monday, Nov. 28 at the St. Louis County Courthouse in Duluth. Both meetings will start at 7 p.m. The Nov. 28 meeting will also be livestreamed on the county’s Facebook page. People do not need a Facebook account to view the meeting.