The Free Press, Mankato, MN

Local News

November 25, 2013

Mankato homeowners should see falling property taxes in 2014

Increases in state aid, tax burden shift allow spending to increase

MANKATO — Mankato homeowners should be spared a property tax increase in 2014 despite passage of a nearly $70 million bond referendum to construct new and expanded schools.

That’s because the general levy that funds operations at Mankato Area Public Schools is falling, Blue Earth County’s tax levy is holding steady, and the city of Mankato’s levy is expected to increase by 1 percent at the most when 2014 budgets are finalized next month.

The most dramatic property tax impacts — both upward and downward — come from the school district. The $69.5 million building plan, which will finance a new east-side middle school and renovations or expansions at several other schools, will require additional taxes for 20 years to pay off the bonds. For a $150,000 home, the increase will be $94 a year.

At the same time, the school’s regular levy of $17.43 million this year is dropping by $977,000 next year — a decrease of nearly 6 percent. Additional state aid was a major factor in the falling levy, said Jerry Kolander, director of business affairs for the district.

The municipal portion of a homeowner’s property taxes should decline next year even though the overall tax collections by the city will rise. That’s because new construction and large increases in the valuations of some property types, notably apartment buildings, will shift some of the burden off existing residential property.

In addition, the Mankato City Council has decided to cut its preliminary levy increase of nearly 2.3 percent to about 1 percent, said City Manager Pat Hentges.

The city’s debt service levy will need to rise about $160,000 to cover money borrowed to finance public projects, such as improvements at All Seasons Arena and the Public Works Department’s move to the former state transportation facility on Victory Drive. That increase could be negated by cuts in the general fund levy, such as reducing by half a proposed 4 percent increase targeted at covering rising employee health care costs and persuading the All Seasons Arena board to use its reserve funds to cut the debt service costs of local governments that finance the arena’s debt.

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