The Free Press, Mankato, MN

Local News

December 8, 2012

St. Peter homeowners to see slight property tax increase

(Continued)

ST PETER —

“We’re just trying to hold it as level as we possibly can,” Olson said.

Keeping up with the inflationary increases in health benefits for employees is always a challenge. Those premiums increased 5 percent this year and are project to rise as much as 9 percent in 2013.

New contracts with district employees will be negotiated next spring, which will impact the 2014 budget. Actions at the state Capitol in the spring also will be closely watched as the new DFL-dominated Legislature, working with Democratic Gov. Mark Dayton, crafts a new two-year state budget.

And the district is projecting steady enrollment growth of 1-2 percent a year for the next decade. Those factors are the ones that drive school budgets and school levies the most.

“What does the state do? What does enrollment do? And what does compensation do?” Olson said. “Those are the three big things.”

Nicollet County’s 3 percent levy increase is driven largely by inflationary increases in county costs plus three additional employees in the sheriff’s office and one in the Social Services Department, said Bridgette Kennedy, the county auditor and interim county administrator.

But the tax impact is largely being felt by farmers because of changes in property tax law made more than a year ago by the Minnesota Legislature and because of fast-rising valuations of agricultural land coupled with falling valuations on homes. The two factors combined to shift the tax burden away from average- to lower-valued homes and toward ag land.

The shift shows up in the county portion of a St. Peter homeowner’s tax bill because the county has a large amount of agricultural land in its tax base whereas the city has virtually none.

“The ag community is paying a bigger share of the taxes compared to the prior years,” Kennedy said.

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