Support the School Referendum

I wrote a letter to the editor of the Post Bulletin in support of the levy referendum. You can read that article here.

Here is some back of the envelop math, keep in mind that this is complex, but the figures below are reasonable:

As expected I did get some questions as to why an 8% increase (the max possible) would not lead to an 8% increase in household property taxes. Here is why. This is based on my own 2014 percentages, so it will vary from house to house. County was 40.5% City was 35.7% and Schools were 23.7%. The max county levy is a 6.8% increase (including HRA) the school districts NON-REFERENDUM levy increase is slightly negative so lets call it 0%.

Put it in the blender and that comes out to about a 5.6% overall, but wait there is more. The city is seeing growth so some of that increase in the levy is taken up by new property tax payers. It is hard to know exactly how much of the increase will be eaten up by new taxpayers, but I will guess 2% which is at least reasonable. Now your levy increase is at about 3.6%.

But wait there is more. Because of how taxes are put against different building classes it also impacts homeowners. In Minnesota the laws are favorable to homes under $400k. Further business property values are soaring relative to single family detached homes. As such they will eat more of that growth. As such I suspect that the typical levy increase before a referendum will be less that 3% or about the rate of long term inflation. The the referendum would be added to that.

So why are city taxes projected to increase? 2 things more than 100% of the projected increase is due to public safety costs. This is because the council hired some officers last year that they did not pay for and are hiring more next year. 2) is infrastructure. The city has decided to develop in a suburban sprawl pattern. in 1966 we were nearly 50k people relying on 11 square miles of infrastructure, now our population has little more than doubled, but we are at 55 square miles. We are deliberately building a less efficient city. All that infrastructure is terrible expensive to maintain. If we wanted to get on a solid maintenance schedule that would require at least a 30% tax increase next year. Unless we decide to embrace smart growth, infrastructure costs will lead to massive tax increased for a generation to come.

Real per person spending on libraries, parks, and the arts continues to decline. The number of employees per capita continue to decline. The city budget per person is basically flat since 2000. The increases people are seeing come from a decrease in state aid and failure to ensure that new infrastructure can actually pay for itself in taxes.

I get to make people doubly mad because I vote against the dumb growth when it is in front of us, and then after others build it I vote for the taxes to maintain it. Responsibility sucks.

If you really want to fight something, vote for the referendum and then fight the fact that the Rochester City Council adds millions of dollars every year to sewer bills so that they can subsidize expensive homes that most can’t afford. Is that fair?

 

 

 

2 comments

  1. My income is frozen, if, as according to you, my property taxes don’t go up 8% but only 7.4% how can I justify voting for this. We get needless expansion on the civic center, the needless cost of a (proposed) pointless new bicycle lane closing one lane on a prominent downtown street where one block to the east they have already shut down one lane of traffic for the same, money to plow unused paths in the winter, the “senior citizen” center, basically a endless list of overpriced and unwarranted projects. And you want the taxpayers to just pony up more, how about some fiscal responsibility from the council and county? I would be in favor of the school increase but on top of everything else it is too much, and the only thing I have partial control over is my vote on the school funding. From my perspective is that if you whip this all in the blender all you get is something you want to send down the disposal…

    1. Fair enough, that is your choice, but I think the negatives associated (and the total property taxes that you will have to pay) with a failed referendum are far worse. All the projects you are referencing are at least not being paid for out of local property taxes. The state and hotel visitors are paying for the civic center. Voters voted in favor of funding the senior center with sales taxes. I agree property taxes are fundamentally unfair because they to not figure in a person’s ability to pay. I am not aware of a bicycle lane closing any downtown lane.

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