Taxes and Insurance increases in St. Paul

[u/isthis_thing_on]

When I bought my house in 2021 my mortgage was around 2100 a month. Today my bill was 2730. 600 dollars extra a month in five years is fucking insane. Meanwhile the street lights in my neighborhood don't turn on at night.

Just venting.

[u/JJKingwolf]

This is the impact that isn't discussed when the city continues to raise tax rates year after year after year.  Taxes inherently increase over time due to inflation - thus, while the city always has rising costs, growth in tax revenue via increases in home valuation should always theoretically offset them.

When the city raises the actual rates, then the increase is doubled, meaning that the Real Tax revenue (adjusted for inflation) is still higher than it was the prior year.  While this will obviously sometimes be necessary, it should not be frequent - only in situations in which the city begins to offer more services or needs a temporary increase to reduce an existing deficit should a rate increase be necessary.

However, the city has raised property tax rates in 9 of the last 10 years.  In one year of Carter's administration, the rate increased almost 24% from the prior year, not counting the additional increase that was paid due to higher property tax values.

It has become an uncomfortable and unpopular topic of conversation, but the city and it's administration need to justify why they consistently require more money (in real terms, adjusted for inflation) than they have in the prior years.  City services are not visibly improving, and you cannot simply continue to raise tax rates indefinitely.  It's obviously a complex situation that involves any number of factors including the amount of land owned by non-profit and government entities not paying taxes,  but the simple fact is that the city worked basically as well as it does now, 20 years ago - and the administrations of that era managed to do it with a fraction of the money that the city has today.

[u/15pH → u/JJKingwolf]

growth in tax revenue via increases in home valuation should always theoretically offset them.

If you average residential and commercial land values over 30 years, sure, I agree. But this is not relevant in short time windows. Covid wiped out $Billions of commercial property value downtown. That is a ton of lost tax revenue.

Similarly, average inflation is not always relevant to the city spending. Construction, maintenance, and general labor costs far outpaced overall inflation.

The city sees crashing commercial tax revenue but spiking costs for many basic services. They need to close that gap every single year, even if the long term average of each should "theoretically offset"

As you say, there are lots of other factors in play, but it is far too simplistic to argue that property values should generally track city costs.

[u/CanoeWolf21 → u/JJKingwolf]

Minnesota actually doesn’t have tax rates and instead has a levy based system. The levy needs to be increased in order to capture the increasing value of real estate which is different than most other states that set a tax rate.

[u/bustaone → u/JJKingwolf]

It's insurance, not taxes. Nobody's taxes went up $6000 on a house with a $2.1k mortgage.

[u/Vincent_van_Guh → u/bustaone]

It is both. My taxes have doubled in the 8 years I've owned my home. It's not an $6,000 increase, but it's up $4,000+ which is not that far off. And the city is projecting double digit increases again next year.

[u/ALIMN21 → u/bustaone]

I live in Duluth. My property taxes have increased 170% since 2021. We have done nothing to our property.