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October 16, 1999
By GUY PRIEL Journal Staff Writer NEW ULM -- When tax statements are received by local property owners at the end of the year, there will be a slight increase over property taxes paid for 1998. Property taxes are affected by the amount of money governments spend when setting annual budgets. Although taxes increased slightly for a majority of Minnesota homeowners, the increase was slightly less than the average home value statewide, according to information released from the Citizens League of Minnesota. The taxes are figured based upon an average home value of $75,000 to determine where a city ranks in regards to overall tax increases. Based upon those figures, New Ulm ranked 38th out of 131 non-metropolitan communities, with a tax of $947. "We basically took an average price of $75,000 to keep the values down in an attempt to keep up with legislative issues," Minnesota Taxpayers Association Spokesman Lynn Reed said. For New Ulm, the city tax portion was up 12.2 percent; the Brown County tax portion was up 7.7 percent and the District 88 portion was down 31.7 percent. "The school tax portion is down considerably, because the government is making moves away from funding schools with property taxes," Reed said. "It is a frustrating process, because it is difficult to explain." The legislature, during the 1999 session, appropriated $59 million in additional funding for state education to lower the share of property taxes used for education. This was also brought about by an increase in the education homestead act. Many people think the mayor or city council are responsible for the increase in property taxes and that is not the case, it is all based on the legislature, he said. The average estimated market value for a home in New Ulm, as of January 2, 1998, was $77,272, according to figures released from the state. This average was up 5.5 percent from a year ago. The average price of a home in Brown County is down 8.2 percent from one year ago, Reed said. Based on that average estimated market value, the 1999 tax for that $77,272 home is $955, which is up 2.3 percent from the 1998 tax figures, ranking New Ulm as 59th. The levy for Brown County, which is used to support 35 percent of the budgeted expenditures for the county, shows an increase of 2.6 percent over last year's levy amount, Brown County Clerk/Auditor Marlin Helget said. "The expenses are up 4.5 percent over last year," he said. "The county is doing fine overall and the tax rate for Brown County is comparable to other surrounding counties. It is fair and leans toward the lower end compared to statewide tax figures." The property taxes also reflect a small portion that is applied toward special taxing districts, such as the Region Nine development Commission and the HRA. The proposed levy for the upcoming year is $6.6 million. The slower pace of tax growth and healthy increases in average home values were due to legislative changes that took effect in 1999. One of these changes was the rate at which homes valued above $75,000 are taxed, thus moderating the tax affect of an increase in a home's value and placing more of a property-tax burden on lower-valued homes. Those home owners with $75,000 homes are essentially paying almost 37 percent of the total property taxes per year, which is still down 4.8 percent from the previous year, when all things remain constant, Reed said. The values that will appear on a homeowners tax statement in March 2000 will estimate the average value for a home in New Ulm at $77,300, with an average selling price of $83,400. The average county portion of a house valued at $125,000 in Brown County would be approximately $750, Helget said. The proposed school levy, that is scheduled for approval in December, requests an increase of less than 1 percent, so the tax rate for the school portion will remain about the same as last year, District 88 Superintendent Harold Remme said. The fact that the state is using less property tax money to fund schools, is leaving an open door for many districts to seek a referendum, because property owners will not be paying as much, leaving more people supportive of the idea of having a referendum, Reed said. Only a certain amount of each property's value is taxable and the amount is determined by the legislature. Since the average estimated value for a home in New Ulm is $77,272, which begins the second tier of taxable rates, the rate is figured at 1.7 percent of the home's value as the amount being taxed. This is down 1.87 percent from the 1998 tax rate. "The property tax bracket is not related to income brackets," Reed said. There are property tax refunds available to homeowners that can be applied for if the homeowner has incomes less than $68,510 with a tax bill that is high relative to income; and if the homeowners tax bill has increased by more than 12 percent from the previous year. Compared to other communities in the region, New Ulm, with 2.3 percent, had the highest increase, with many experiencing a slight decrease overall. Sleepy Eye, with an average estimated market value for homes at $58,783, will pay an estimated tax of $620, which is down 3.7 percent from 1998. This puts Sleepy Eye at 113 out of 131 non-metropolitan communities.
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