Kelly Anderson, a special education teacher who cares for a deaf-blind foster child in her condo outside downtown St. Paul, told the city council this week that she and other parents of disabled children were taken aback by the size of the estimated property tax increase they’ve received in the mail.

For several members of her friends group, city, county and school district tax increases could total $800 to $1,000, given their rising home values.

“Even I said, what the actual fudge? I was flabbergasted,” said Anderson, who described herself as a progressive voter.

With property owners like Anderson in mind, the St. Paul City Council will delay a long-scheduled vote by a week and adopt the final 2025 city budget and tax levy on Dec. 11, giving the seven council members time to advocate for up to $6 million in proposed budget cuts that have been hotly opposed by St. Paul Mayor Melvin Carter.

The council’s annual truth-in-taxation hearing Monday evening drew a near-capacity crowd, with two large lines of homeowners testifying over the course of more than two hours against the mayor’s proposed property tax levy increase of 7.9%. Several longtime residents said they feared being priced out of their homes.

“Use a scalpel, not an ax, and find what you can cut out to make this increase much, much smaller,” said Anderson, addressing the council Monday.

Property values

The challenge? In addition to increased city spending in light of inflation, St. Paul homeowners are poised to absorb some of the property tax burden that would otherwise be shouldered by apartment buildings and other types of properties, which have lost or leveled off in value.

While residential property values are climbing in St. Paul by an average of nearly 4%, values have fallen somewhat for commercial and industrial properties by about 1.5% and 2.4%, respectively. Apartment buildings have dropped in value the most — by almost 4.5% — after years of record growth, according to the Ramsey County Assessor’s office.

Rising home valuations are slim consolation for those homeowners, like Anderson, who have no immediate plans to sell their properties.

The mayor has said holding the city levy increase to 5%, as some council members have advocated for, would force the police department to cut its authorized strength by 16 officers and possibly shutter libraries and rec centers. Some in the audience were incredulous, noting in a city of some 300,000 people, a $6 million budget cut would average about $20 in reduced spending per capita.

“Pretty soon I’m going to be taxed out,” said Michelle Davis, a homeowner from the city’s East Side, addressing the council. “Why should I be forced to sell my home, when I bought my home to retire? This has to stop.”

Climate advocates oppose budget cuts

Taking somewhat of an opposite tack, climate advocates with Unidos and the faith-based organization ISAIAH also turned out in heavy numbers to advocate for maintaining the planned spending on climate initiatives in the mayor’s budget. They include a home weatherization program, replanting a city tree canopy heavily impacted by Emerald Ash Borer, a citywide geothermal heating study and more.

ISAIAH member Christine Danielson said the council’s $6 million in proposed budget cuts would add up to meager savings for homeowners while cutting into those and other valuable climate programs unlikely to be funded by the next presidential administration.

The city council last month chose to activate a franchise fee that will be passed onto consumers through Xcel Energy gas and electricity bills in April but not in November. Not adding the second month of fees will save an estimated $34 per household, on average, that would have gone toward the mayor’s climate initiatives.

“For me, I’m amazed not that my taxes are going up, but that cuts for things we were promised as constituents are happening,” said Madi Johnson, a Hamline-Midway homeowner and member of Unidos. “We get this new funding through franchise fees … but we’re asking our poorest families to give up on getting shade by the freeway. It’s the lowest-income families who need these weatherization programs.”

Under the mayor’s $855 million budget proposal, the owner of a median-value home — a house carrying an estimated market value of $267,000 this year and $275,000 in 2025 — would face an estimated property tax increase of about $133 attributable to the city levy increases. New fees for services such as sewers, recycling, trash and water would add another $108.

Additional increases would follow Ramsey County, St. Paul School District and Metropolitan Council levy increases, which have yet to be finalized.

Given rising home valuations in many neighborhoods, several homeowners said their property tax increases would be several times larger than that.

“My property tax went up 24%,” said Taylor Phelps, a Highland Park homeowner, addressing the council. “My valuation went up 9%, but the only time an individual would realize that is when they sell their house. … I’m in favor of modest tax increases, but not what we’re seeing.”

Council, mayoral negotiations continue

The more than two-hour truth-in-taxation hearing drew six of the seven council members. Council Member Anika Bowie was absent.

“This is the most packed truth-in-taxation hearing that I think I’ve had in my entire time on the council,” said Council President Mitra Jalali, addressing the room at the close of the hearing. She acknowledged the stress associated with property tax increases, as well as the stress related to uncertain state and federal funding for council priorities under the incoming presidential administration.

Jalali said budget negotiations with the mayor’s office were ongoing, and while she personally was not in favor of $6 million in budget cuts, a majority of the council was still intent on reducing the levy as much as possible, she said. She said she understood the mandate “to find savings — and to look for reductions that don’t compromise important services.”

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