The Free Press, Mankato, MN

Local News

November 4, 2009

Tax update lowers Mankato burden

By Dan Linehan

MANKATO — Some good news for Mankato taxpayers: An October update to the tax base boosted it about 2.5 percent, which will send the city’s portion of taxes on each parcel down for 2010.

The City Council voted 5 to 2 in mid September for a preliminary levy increase of 4.27 percent. That raised the city’s portion of property taxes on a $140,000 home by $9.52. That figure assumes the home’s value was stable.

But local governments are only one piece of property taxes. The other piece, which is arguably more important, is the tax base.

New construction that was calculated between August, when the city received its first estimate, and October has pushed the tax base up and the burden on each property down, Mankato City Manager Pat Hentges said. Increases in commercial property valuations also played a role.

If tax base is a pie, then each slice gets smaller as the pie gets bigger.

Taxes on an average-value home in Mankato will decrease by $3 or $4 in 2010, Hentges said.

It might not seem like much, but the City Council makes it a goal every year to not increase the tax rate.

Councilman Jack Considine said the tax rate has decreased for all but two of his 11 years on the council. Thanks to the October update, the tax rate will fall again in 2010.

Considine credited the growth in the tax base and decrease in the tax rate on livability initiatives recommended by citizen and government groups.

“I think the growth that we experienced that made this possible is a direct result,” he said.

Hentges said the city’s bond rating firm, which attaches a sort of credit score to the city, was intrigued to hear about value increases of 5 percent in a recession as well as an unemployment rate lower than the state average.

He noted that the new commercial growth doesn’t come without the cost of city services in the future.

The update will affect other local governments, as well. Blue Earth County Administrator Dennis McCoy said the county will evaluate the change in coming weeks.

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