Categorized | IN OUR COMMUNITY

Different parts of the city see different property tax trends

Posted on 10 September 2018 by Calvin

As area neighborhoods’ residential home values continue to bounce back from the 2008 recession, St. Paul neighborhoods are seeing mixed results as the 2019 property tax picture takes shape. The highest projected increases in residential market values will be seen in neighborhoods where recovery from the 2008 recession continues—namely Frogtown, Dayton’s Bluff, Payne-Phalen and the West Side. Hamline Midway, Como, St. Anthony Park, and Merriam Park saw more modest gains.

In the Midway, Hamline Midway homeowners can expect the highest median home value increases, followed by Como and Merriam Park homeowners.

On Aug. 15 City Council members discussed the property tax trends with Ramsey County Auditor/Treasurer Chris Samuel. Samuel presented a neighborhood by neighborhood look at market rate trends, as well as a first look at where property taxes are headed.

“We continue to see good market value growth in the city of St. Paul,” Samuel said. “The values in St. Paul are higher than they’ve ever been.” Properties in St. Paul increased slightly more in value than the suburbs.

Overall in St. Paul, estimated market values are up 7.6% from the prior year. Values are now above the 2008 peak when the nation plunged into a recession.

How levies translate into amounts on property tax statements hinge on several issues, including state actions to set property tax policies and class rates, and various state aids. The county assessor determines market values and assigns property classes. Improvements to properties and sale of comparable properties play roles. Shifts and changes in the tax system also affect what is paid. People won’t know what they’re paying in 2019 until they get property tax notices in November, said Samuel.

The median value home in St. Paul has an estimated market value of $186,200 for 2019. That’s a value increase of 7.1%. That homeowner paid $2,156 in property taxes for 2018, based on an estimated market value of $173,900.

A $24 decrease would be seen due to shifts and changes in the property tax system, including a gain of 22.7% or $5.7 million from the metro area’s fiscal disparities pool, changes to the homestead exclusion benefit, and other tax shifts.

The median value home’s owner would see a $153 increase due to the hikes in city, county and regional rail levies. Thus far the levy increase is at $129 or 5.1%, for a total levy of $2,645 for 2019. That doesn’t include the St. Paul Public Schools and any levy increase planned. The school district must set its maximum levy by Sept. 30.

Neighborhoods that have seen the slowest post-recession recovery will see the highest increases in market value in 2019, said Samuel. Frogtown leads the pack with a 16.3% increase in median estimated residential market value, with values climbing from $111,700 in 2018 to $129,900 in 2019. This homeowner paid $1,416 in 2018 and would pay $1,682 in 2019. That’s a $266 or 18.8% tax increase.

Tax estimates for 2019 don’t include St. Paul Public Schools.

The neighborhood with the lowest median value increase is St. Anthony Park, at 3.4%. That reflects a market value change that went from $285,600 in 2018 to $295,350 for 2019, and tax changes that would go from $4,491 in 2018 to $4,514 in 2019. That’s a $23 or .5% increase.

In Hamline Midway, the median value home’s market value went up 6.6%, from $167,700 in 2018 to $178,800 in 2019. Taxes would increase from $2,407 in 2018 to $2,519 in 2019 for a jump of $112 or 4.7%.

Como’s median value home went up 6.4%, from $204,700 in 2018 to $217,700 in 2019. Taxes were $3,061 for 2018 and would be $3,185 in 2019, for an increase of $124 or 4.1%.

The neighborhoods of Merriam Park, Snelling-Hamline, and Lexington-Hamline saw a median home value increase of 4.7%, from $287,600 to $301,200. Property taxes would increase from $4,525 in 2018 to $4,615 in 2019, up $90 or 2%.

But remember, these are median values. Individual property owners’ values and taxes hinge on a case-by-case basis of home values.

One issue council members noted is confusion over an increase in what local governments levy, and how that translates to property tax bills. People sometimes assume that a levy increase translates automatically into the level of property tax increase.

The city has proposed an 11.5% property tax increase for 2019. Ramsey County has proposed a 4.3% increase for general operations and a 7.8% hike for regional rail. St. Paul Public Schools hasn’t set its 2019 levy rates but plans a referendum this fall to raise $18.6 million. The school district must also wait for information from the state Department of Education every fall to set its levy.

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