St. Paul property owners were shocked to receive their latest property tax statement with a 23.9% increase in St. Paul taxes. Both residential and commercial property taxes are increasing dramatically, but, as usual, the devil is in the details.

Unlike many other cities, St. Paul has a long history of assessing street and sidewalk maintenance separately. St. Paul taxpayers have long complained about the maintenance costs largely because it was billed separately and stuck out like a sore thumb. Now, with the street and sidewalk maintenance costs included in property tax bills, there are complaints about the size of the 23.9% St. Paul levy increase.

City officials report that only 4.9% is due to “normal budgetary pressures” and the remaining 19% is due to including the cost of street maintenance into the typical property tax bill. The good news is that tax payers will not be paying the extra maintenance costs separately. Some of the 4.9% levy increase is intended to make up for less Local Government Aid coming from the State of Minnesota, a challenge that most Minnesota cities are facing.

St. Paul is not alone in the recent tax increases. Ramsey County and the St. Paul Public Schools both increased their levies to raise more tax revenue. St. Paul city officials have called this a “tax year like no other”, and I am sure St. Paul residents and business owners will agree.

Written by: John Young, CCIM, Paramount Real Estate Corp.