Minneapolis residents could face a property tax levy increase of up to 6.5% next year, though its impacts wouldn’t be felt evenly across the city, a disparity that concerns some members of the Board of Estimate & Taxation.
In a split vote Wednesday, the six-member board cleared the way for officials to approve Mayor Jacob Frey’s proposed tax levy later this year. He will negotiate the figure with the City Council this fall, but in recent years the council has adopted his recommendations.
Board President Samantha Pree-Stinson and Vice President Steve Brandt — the two members elected directly to the board — voted instead to set the maximum property levy at a lower level, noting that North Side wards that have been historically marginalized and are home to many people of color are likely to see the biggest impact.
“The historical harm that’s been done to certain wards does not have an ebb and flow,” Pree-Stinson said. “It is what it is. We’re still trying to make corrections for it.”
Frey has proposed a $3.3 billion spending plan for the next two years that aims to boost staffing for police and mental health teams, combat climate change, improve the quality of public housing and boost economic opportunities for people of color, among other initiatives.
To fund that proposal, he’s relying on a 6.5% tax levy increase in 2023 and a 6.2% increase in 2024. The levy is the amount of money that governments collect in property taxes, not the amount that individual property owners pay. The city anticipates that the owner of a home with a median value of $319,000 would pay about $1,835 next year. Its projections also anticipate that North Side residents will see some of the greatest impacts on their property tax bills, in part because home values are rising faster there than in other sections of the city.
Brandt wrote a proposal to instead set the city’s maximum property tax levy increase at 5.6%, a figure he hoped would provide some relief to people also dealing with the impacts of inflation and “give the mayor 98.6% of what he requested.”
The board’s four other members — Frey, Council President Andrea Jenkins, Council Budget Chair Emily Koski and Park & Recreation Board Commissioner Billy Menz — instead voted to clear the way for the mayor’s proposed levy.
Frey countered that city staff had spent months trying to “bring the levy to a position that was [as] low as possible,” while acknowledging that the city is also impacted by inflation, faces the likelihood its police department will be subject to a pricey consent decree, and is trying to replenish offices that are short-staffed.
“Importantly, those wards are not just the wards most impacted under my proposed budget,” Frey said. “They are also the same wards that would be most impacted by [Brandt’s] proposal.”
City staff said state law constrains their ability to vary property tax levy rates. Brandt said he’d like to see state lawmakers enact changes that would give city leaders the ability to enact more progressive tax measures aimed at easing the burden on the lowest income residents.