[Mpls] Comparing elected officials property taxes to your own?

[Carol Becker]

Ken Bradley wrote:

>  I will not post any elected officials names but my home is assessed 
> significantly lower then several city council members, yet I pay more 
> taxes. One home was assessed $10,000 more and the other $33,000 more. I 
> paid $78, and $154 more per year. This is based old tax data, the website 
> does not have the most recent updates. It seemed strange that our house 
> would be valued less and we would pay more then our elected officials. It 
> also could make complete sense if someone explained it to me.
>
>  To double check I compared one council member to their neighbors. Several 
> neighbors homes where assessed at a much lower value but also paid 
> significantly more in taxes. The neighbors market value was $60,000 less 
> then their council member and they paid $3,448 more in property taxes. 
> Again it might all make complete sense if someone explained it to me, but 
> it really leaves me scratching my head tonight.

There are a couple of reasons that come to mind off the top of my head here 
as I work on a paper for class at 1:00 am.    The first easy one is that you 
are in different watershed districts.  There are different watershed 
districts in the City that have different rates.  Not having looked at them 
recently, the highest watershed has typically been the Minnehaha Watershed 
District and if you were comparing across watersheds, that could be part of 
the reason.

The second one is limited market value.  Say that you bought a hovel and 
rehabbed it and now it gorgeous and worth a bundle.  Say a friend of yours 
just bought a gorgeous house.  So both of you now own houses and they are 
worth exactly the same today.  But because there is a limit to how fast your 
taxes can go up, you who bought the hovel and rehabbed it started with a 
lower market value, i.e. a lower value on the assessor's books.  So your 
taxes can only go up so much each year.  The person who bought the gorgeous 
house on the other hand, gets socked with the full tax amounts immediately. 
Because of this, it is totally possible for two houses to be worth exactly 
the same and pay different taxes.  In the end, when the full value of both 
houses is being taxed, the taxes should be the same.

There are questions about whether limited market value is fair or not.  The 
Legislature had planned to take this cap off in 2007 but pushed that back to 
2009.  The reason is that there is over $10 B in property value that is not 
currently being taxed because it is under the limited market value cap. 
Were they to take that cap off, people would see extreme increases in their 
taxes rather than the slow frog boiling approach that we see today. 
Legislators have seen fit to follow the frog boiling approach rather than 
the shock therapy.

Also one other idea comes to mind.  There are programs like the "This Old 
House" program which let people do improvements to their homes without 
immediately being taxed for them.  This could also contribute to why two 
homes might have the same estimated market value but different taxes.

Carol Becker
Longfellow
Geek
Upcoming Member, Board of Estimate and Taxation (Thanks to all who voted for 
me!)