Star Tribune Tue, 15 Apr 2008 04:07:25 GMT
Sagging home values hit the cities right in the tax base
Minneapolis and St. Paul both see drops, part of the foreclosure ripple effect. It means tax rates would have to rise just to stay even. The foreclosure-ravaged Minneapolis property tax base has shrunk for the first time since the mid-1990s. St. Paul is reporting an even bigger drop. That means that property owners would have to pay higher tax rates next year just for the cities to collect the same amount of money in property taxes. Minneapolis Assessor Patrick Todd told a City Council committee Monday that the estimated market value of property in the city fell by 2.7 percent between the start of 2007 and 2008. St. Paul's tax base took an even bigger hit, at 3.6 percent. The driving factor in both cases is an erosion in home values, triggered by a surplus of homes on the market because of foreclosures and tightening credit.
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