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St. Louis County eyes 4.39% tax levy increase

The impact of the levy, offset by the tax capacity increase, on property owners would be a $74 average decrease in county taxes on a home valued at $100,000.

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DULUTH — The St. Louis County Board is a step closer to finalizing its 2023 budget after giving initial approval of its preliminary maximum property tax levy Tuesday. Commissioners will vote on final approval of the 4.39% maximum levy increase Sept. 27.

However, many property owners may not feel the brunt of this increase as the county also saw an estimated 17% increase in net tax capacity, according to county administrator Kevin Gray.

The impact of the levy, offset by the tax capacity increase, on property owners would be a $74 average decrease in county taxes on a home valued at $100,000, an decrease of $110 for a home valued at $150,000, a decrease of $148 for a home valued at $200,000, and a decrease of $185 for a home valued at $250,000 according to the county, assuming that the value of the home remained the same. That doesn't include any increase by a city, township or school district, which also show up on your tax bill.

Councilors will take up the mayor's proposal to raise city property taxes by up to 8.9% at its next meeting, Sept. 26.

Commercial properties saw less overall growth in valuations and will therefore see less impact on the county property taxes, according to Gray.

Reasons cited for the increase include inflation, the need to continue to fund employee salaries and benefits, and to sustain investments in mental health and substance use disorder services.

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"We, like everyone, are experiencing the significant impacts of inflation, and increased costs driven by supply chain challenges. Fuel costs alone have increased by more than 50%, which is particularly significant when you remember our public works and sheriff's office vehicles cover our 7,000-square-mile county," Gray said.

Other improvements such as investments in enhanced medical services at the county jail, technology improvements and economic development efforts were also listed as main reasons.

Commissioner Keith Nelson, chair of the board's finance committee, also cited the state Legislature's failure to pass a bonding and tax bill, as he said those would have helped offset the increase.

"While any increase in the levy concerns me, this number is reasonable, responsible and reflective of the times in which we live," Nelson said. "Our state partners have failed county government and the communities that we serve by failing to pass a tax bill and a bonding bill. Despite a $9 billion surplus, they've left local government units to contend with the budgetary challenges."

The largest shares of 2023 levy dollars will go to public health and human services, at 32% or $52 million, and public safety, also at 32% or $52 million. Public works comes in third, making up 18% of the budget, or $29 million, 14% goes to general government work, about $29 million and 4% of the fund will go to debt service.

Today's vote during the committee of the whole meeting was unanimous in favor of the levy increase. The final vote on the preliminary max levy will occur during the next general board meeting on Sept. 27 in Fine Lakes Town Hall in Wright.

Minnesota counties are required by law to set their maximum property tax levy by the end of September. As the board and staff work to finalize the 2023 budget over the next few months, the levy amount may be reduced, but it cannot increase.

Commissioners will vote on the final budget on Dec. 13. The public can ask questions and give comments on the levy (not necessarily on specific property tax bills) at meetings set for Nov. 21 at the county courthouse in Virginia and Nov. 28 at the courthouse in Duluth, both at 7 p.m.

Teri Cadeau is a general assignment and neighborhood reporter for the Duluth News Tribune. Originally from the Iron Range, Cadeau has worked for several community newspapers in the Duluth area for eight years including: The Duluth Budgeteer News, Western Weekly, Weekly Observer, Lake County News-Chronicle and occasionally, the Cloquet Pine Journal. When not working, she's an avid reader and crafter.
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As reported by St. Louis County District Court.