Proposed Property Tax Levies Must Be Finalized by Sept. 30

September 19, 2022

Cities with more than 500 people are also now required to submit new supplemental budget information.

Under state law (Minnesota Statutes, section 275.065), cities must adopt a proposed property tax levy by Sept. 30. The proposed levy will be used to produce parcel-specific taxpayer notices, also referred to as truth-in-taxation notices, which will be distributed to taxpayers in November. If a city fails to certify its proposed levy to the county by Sept. 30, the county auditor is required to use the authority’s previous year’s final levy as the levy for the following year.

New requirement for cities with more than 500 population

In addition, beginning this year, cities with more than 500 population are required under Minnesota Statutes, section 275.065, subdivision 3b to submit supplemental summary budget information to their county auditor for both the current year and the proposed year in a form similar to the information required to be submitted to the Office of the State Auditor in January. The supplemental summary budget information includes:

  • Levy information — The certified levy for the city for taxes payable in the current year as well as the proposed levy for taxes payable in the following year, and the increase or decrease between these two amounts, expressed as a percentage.
  • Supplemental revenue information — Property taxes, special assessments, state general purpose aid, and state categorical aid.
  • Expenditure information — Current expenditures for public safety, streets and highways, sanitation, human services, health, culture and recreation, conservation of natural resources, economic development, and all other current expenditures.

The supplemental summary budget information provided to the county will be used by the county to prepare a separate, one-page statement to be delivered with the notice of proposed taxes. If a city fails to report the required supplemental information to the county, the county auditor is required to list the information for the city as “budget information not reported” on the portion of the statement dedicated to the city’s budget information.

Learn more about the new requirements

Taxpayer notices likely will be impacted

This fall’s taxpayer notices will likely be impacted by the rapidly fluctuating valuations and therefore shifting property tax burdens for some types of property. According to the Minnesota Department of Revenue, on a statewide basis:

  • The market value of properties classified as residential homestead have increased by 17.1%.
  • Apartments have increased by 9.3%.
  • Agricultural homesteads have increased by 12.3%.
  • Cabins have increased by 4%.
  • Properties classified as industrial increased by 11.5%.
  • Commercial properties increased by 2.7%.

The changes within individual cities and counties could be higher or lower than the statewide averages noted above.

How changes to the metropolitan fiscal disparities pool will affect property tax levies

In addition, as noted in a previous article by the League on changes affecting the fiscal disparities program, the metropolitan fiscal disparities pool and the distributions to cities has dropped for the taxes payable 2023. The result for most metropolitan cities is a smaller share of their property tax levy being generated via the fiscal disparities distribution levy and therefore a greater share of their 2023 property tax levy falling on local taxpayers. We are waiting on information for the Iron Range fiscal disparities program, but with pandemic impacts on commercial properties it is possible that the Iron Range pool will experience a similar reduction.

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