St. Paul City Council Approves Maximum Property Tax Increase of 15.34%

St. Paul could raise its property tax to as much as 15.34% next year, but the hike would be partially offset by lower street maintenance bills for residents.

City Council on Wednesday voted unanimously to approve a maximum property tax of $202.3 million, an increase officials say is fueled by a change in how the city pays for services, the inflation and new operating expenses.

Council members will approve a final budget for 2023 in December and said they plan to work in the coming months to reduce the increase as residents face their own financial challenges, including rising inflation and the residual economic impacts of the pandemic.

“I’m going to support the levy limit today, but I consider a 15% levy increase… absolutely unacceptable when people are struggling so much, especially when we know these tax increases are hitting our communities hardest. poor the toughest year after year,” said board member Rebecca Noecker.

Last month, Mayor Melvin Carter proposed a $782 million budget for 2023, which he called a “bottom-up” tax plan. His proposed property tax would amount to a property tax increase of $231 for the owner of a median-value home in St. Paul, or $261,800.

Property tax is the amount the city collects in property taxes, not the amount individual property owners pay. Property owners could see further increases to their tax bills from Ramsey County, which has already proposed a 4.5% levy increase, or from the St. Paul School Board.

Half of the proposed tax increase is a response to a May court ruling that ordered St. Paul to stop assessing individual property owners for routine maintenance of streets adjoining their property.

Previously, around $15 million in appraisals helped pay for street lighting, sweeping, seal coating, milling and laying. Now most of those costs are transferred to St. Paul’s general fund, which is funded primarily by property taxes.

The court ruling prevents the city from charging tax-exempt properties — such as churches, hospitals and universities — for the services.

The other half of the tax increase — $13.3 million — would go to the city’s base operating budget.

Like many local governments, St. Paul did not increase its property tax in 2021 to avoid adding expense to families already facing hardship at the height of the pandemic. In 2022, the municipal tax increased by 6.17%.

At a public hearing Tuesday night at the Lake Como Pavilion, about three dozen people shared their thoughts on Carter’s proposal with the council. The majority of testimony came from city workers in various unions urging officials to raise wages.

“Everything is going up — the cost of living is going up and all of our bills are going up,” said Emanuel Gomez, an employee of St. Paul Regional Water Services. “But, again, we’re not getting the adequate pay each of us needs to survive here.”

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