MN Property Tax Changes Coming

ALBERT LEA, Minn. - It may not be tax season yet, but Minnesota residents could be in for a big change when it comes to paying property taxes.
    
That's because of a tax law change approved by the state legislature earlier this year.

Minnesota lawmakers overhauled a program designed to give property tax relief to homeowners, but in the process they caused property tax burdens to increase on higher value homes, commercial properties and renters.

In Albert Lea, city leaders want to make sure everyone understands the new law.

“How it was previously calculated was the overall tax burden was reduced by a certain amount,” said Ryan Rasmussen, Freeborn County assessor.

Rasmussen explains the old market value credit system is gone, meaning businesses, renters and high value homes could see an increase in their property tax burden.

“We've ran some preliminary numbers in Albert Lea so the non-homestead properties are probably looking at a 10 percent increase in their overall tax,” said Rasmussen.

The state will save about $260 million with this new change, but that's money coming from the residents.

“Essentially the taxpayers in the state through property tax are picking up that $260 million difference,” said Rasmussen.

Because these tax changes affect so many people, the City of Albert Lea wants to make sure all residents understand the changes. They're also taking suggestions on how to spend that money in future budget years.

“With this one being so complicated I think we're going to try to provide a little explanation that it's really beyond the city's control,” said Chad Adams, city manager.

Adams says starting next week city council members will hold various meetings in their ward to explain the change, but they also want to get the public's input on budget decisions.

“As we plan ahead for 2013 and 2014 we're going to have to be creative and innovative and potentially collaborate with some of our regional agencies,” said Adams.

Especially if lawmakers in St. Paul continue to make changes to the state's tax laws.

“As the state looks at reducing their spending one way they can do that is lower the amount they're sending back to local governments,” said Rasmussen.

One positive thing that comes from all this is the city's local government aid payments. Under this new law, when the state announces L.G.A. amounts for the upcoming budget year they must pay cities and counties that amount. That’s something that wasn't required in the past.

List of Albert Lea meeting locations and times: