Double-digit tax increases are further fueled by increases in home values

Saint Paul property owners did not take kindly to the city’s plan to increase the property tax levy by as much as 15.34 percent in 2023. More than two dozen of them turned out on December 6 for the City Council’s Truth in Taxation hearing. Over a dozen of them spoke about the hardships they are experiencing as the result of their burgeoning property tax bill.

Brian Bergson of Merriam Park wondered how long his family would be able to remain living in Saint Paul. A former state legislator and a disabled veteran, Bergson lives on a fixed income. His estimated property taxes are going up 48 percent in 2023.

“I love my city and my neighborhood,” Bergson said. “We’re blessed to have a home. We bought it six years ago because it was affordable.” However, he said, the assessed value of his home has increased 62 percent since then, “and my family budget, because of these tax increases, is going to be in a deficit.”

Taxpayers blame city’s spendy ways

The City Council adopted a final city budget and property tax levy for 2023 on the day after the Truth in Taxation hearing (see city budget story here). The council trimmed the tax levy by $1.6 million, bringing it down to $201.06 million. However, the levy increase still stood at 14.65 percent, in support of a total city budget of $781.5 million.

City officials explained on December 6 that much of the increase in individual property tax bills was the result of an increase in the value of individual properties. However, homeowners scoffed at that notion. Several speakers said that city spending is the problem.

Hardships of higher property taxes

Homeowners told of having to skip dinners out, cancel trips and forgo other purchases just to cover their property tax bills. Several were on the verge of tears, telling the City Council how they have had to work more than one job to cover rising taxes. Several said they would never be able to sell their homes for the assessed value.

“I live in Frogtown and my house has been assessed at over $200,000,” said Cosandra Lloyd. “That’s ridiculous.”

Lloyd said she is looking at a 28 percent increase in her property taxes for 2023. “To see numbers like that really alarms me,” she said. “I keep getting these increases, yet our services aren’t increasing.”

A call to bolster the tax base

“Our house has increased in value by $100,000 in two years,” said Gloria Zaiger of Highland Park. “How do we stop this madness year after year after year?” According to Zaiger, there is a lack of accountability on the City Council when it comes to spending. She urged city officials to do more to bolster the tax base.

Too many industrial properties are being redeveloped for housing and not higher-valued uses, Zaiger said. She complained about the use of tax increment financing (TIF) for redevelopment. TIF diverts property tax revenue from local governments to cover development costs, and that increases the tax burden on other property owners, she said.

The median-value home in Saint Paul now stands at $266,300. That is up from $228,700 a year ago—a 16.4 percent increase. The property taxes on that home would increase by 14.8 percent, from $3,418 to $3,924, if the city, county and school district adopted their maximum levies.

City is levying $25.7 million more in 2023

The city’s property tax levy is increasing from $175.37 million in 2022 to $201.06  million in 2023, or slightly less than the $202.27 million tax levy in Mayor Melvin Carter’s proposed 2023 city budget. About half of the tax levy increase can be attributed to a ruling last spring by the Ramsey County District Court that found the city’s 20-year practice of assessing all property owners for street maintenance costs—even tax-exempt property owners—to be unconstitutional.

A crisis in the making?

“I believe we’re in a crisis situation,” said Summit-University resident Barbara Gail Rohde, referring to the steep increase in property taxes and inflation. Rohde regularly hears from investors wishing to buy her home. That is a trend the City Council should be following, she said. “But where will the people who can’t afford their homes move to?” she asked.

Joe Jansen, who owns a home in Highland Park, said his rental property in Summit Hill is seeing a 17.2 percent increase in property taxes. With rising expenses and a recently enacted 3 percent cap on annual rent increases, he asked, “How am I supposed to run a business?”

Household budgets are being squeezed

Roxanne Stickney of Payne-Phalen has seen her property taxes increase by $3,000 over the past year as the value of her home more than doubled, she said. She estimated that about 10 percent of her take-home pay will now have to be spent on property taxes. “You’re squeezing us out,” she said.

Catherine Bickharry, who shares a home in the North End with her children and grandchildren, was near tears as she described how she struggled to become a homeowner again after losing her husband and their previous home. Bickharry said the North End is “not a high-buck neighborhood at all, but I’m getting to the point where I can’t afford to keep this home anymore. The house was built in 1910. It’s an old house, and I’ve done nothing to it.” But in four years, her home’s assessed value has increased from $147,000 to $251,000.

Meg Duhr of Saint Paul’s West End bought and rehabilitated two vacant homes. She now lives in one and rents out the other. Duhr said she can afford to pay her property taxes now. “But like a lot of people, I wonder, what is the end point?” she asked. “Seeing how property taxes have spiraled makes me wonder about the future and how long we’ll be able to afford it.”

Faith Gil bought her West End home in 2021. “I can tell you without a shadow of a doubt that I wouldn’t be able to buy that home today,” she said. “Please, please don’t raise these taxes.”

— Jane McClure

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