Residents take issue with higher property taxes at county’s Truth in Taxation meeting

Published 6:33 am Thursday, December 5, 2019

For some residents, this year’s property statements brought good news and bad news.

The good news is that their property is worth more than last year, according to the county’s market value studies. The bad news is that it means their property taxes are also going up.

While the county does not normally discuss property valuation changes at its truth in taxation meeting, due to major shifts it did at the Dec. 3 public hearing.

This year, the county has a recommended a levy of about $22.6 million, up about $800,000 from the 2019 levy of $21.8 million.

This represents a proposed 3.5 percent increase.

The levy makes up 43 percent of the county’s $53.4 million budget for 2020, with the other revenue coming from federal and state dollars, licenses and permits and other sources.

County Administrator Trish Harren said when she began working in county government 15 years ago, federal and state funds comprised about two-thirds of county revenue, whereas now it is about 44 percent.

The area of the budget with the largest levy increase is the county’s general fund, with $13.4 million of its $21.2 million total revenue coming from the levy. This is an 11.9 percent increase from 2019.

Some of the largest driving forces behind the increases include a 2.5 percent cost of living adjustment pay increase for county employees, which costs about $1.7 million, paying back some of the $6 million in reserves used to pay off a bond for the jail before interest rates rose and the hiring of 11 new employees, which is estimated to have a budget impact of $470,000 due to the county being reimbursed for some of the positions, Harren said.

Resident Jim Hartson had a problem with the employee costs at the county and said it needs to get its costs under control.

Increased taxes on his property means he needs to do more with less money, he said.

“How are you doing more with less?” Hartson asked the Board.

Commissioner Jerry Reinartz said everyone’s costs go up, including the county’s. A large portion of the levy increase is to begin paying back the reserves the county used to pay off the jail bond, he said.

According to the county, without the 1.2 percent levied for cash reserves, the proposed levy increase is 2.3 percent.

Paying off the jail bond early saves the county an annual $1.5 million payment.

Other cost savings include employee driven changes to contracts, revenue capture and two employees sharing a position, totaling $250,000 in savings.

The county also has no choice but to hire people to complete the mandates ordered by the state and federal governments, Reinartz said.

“We’re not responsible for the mandates we have,” he said.

As for employee costs, Harren said the county is required by law to pay its employees around market rate. In addition, 40 percent of employee costs are benefits like insurance and retirement, she said.

Not all of a property owner’s taxes go to the county. Harren laid out how the split looks in Austin.

“Essentially, for about every dollar, about a third of it goes to fund county services, a third goes to fund city services and a third goes to fund the school district,” Harren said.

Another issue centered in Austin is the changing value of properties.

On average in Mower County, there was a 5 percent market value increase, with some parcels in the city going up by at least 13 percent.

The county assessments are reviewed by the Minnesota Department of Revenue and must be within 90 percent to 105 percent of market value, otherwise the state will manually adjust the assessments, Harren said.

The higher the property value, the lower the homestead tax exclusion is, she said.

In addition, with a large number of properties in Austin aging and either going down in value or staying the same, there is another reason why taxes are increasing, Harren said.

“When you have large areas like that where values are going down, it also creates a tax shift,” she said. “We really have a need for new housing in Austin to take pressure off of the market.”

Reinartz said the tradeoff in Minnesota for having property values go up is that property taxes are tied to values here.

Jonathan Rymer, who moved to Austin from Tennessee, said the rise in property taxes is a problem.

“I see an alarming trend that property taxes continue to go up,” Rymer said.

It has gotten to the point where he and his wife have considered an early retirement back in Tennessee, where taxes are much lower.

“We need to make sure we keep Austin a place where people will want to come here,” Rymer said.

He does not necessarily agree that his property values are increasing at the rate they have been for the last few years.

The public hearing on the 2020 budget and levy was continued to 10 a.m. on Tuesday, Dec. 17, during the Board’s next meeting. There, the commissioners will give their input on the proposals.