Property taxes for homeowners in St. Paul’s poorest neighborhoods are poised to rise next year by as much as 8% to 16% or more, depending upon how final numbers play out as city, county and school district levies are approved this December.
Together with about $125 in rising water, sewer and recycling fees, that could add well over $600 to total charges for residential property owners in the Thomas-Dale/Frogtown, Payne-Phalen, North End and West Side neighborhoods. Homeowners in Hamline-Midway, Dayton’s Bluff, Como and Summit-University would be the next-most impacted by percentage increases.
Homeowners in St. Anthony Park, Battle Creek, Sunray, Highwood and downtown St. Paul would see their property taxes go up the least of any neighborhoods in the city, percentage-wise, while still seeing hikes of several hundred dollars.
‘Burden shifting from commercial to residential’
Moreso than at any time in the recent past, “the tax burden is shifting from commercial to residential,” said Madeline Mitchell, budget manager for the city of St. Paul, addressing a roomful of elected officials Monday at the St. Paul Public Schools district administration building.
The likely result — large tax increases for the poorest homeowners — isn’t lost on local government officials.
“There are folks in my ward right now that can’t even rub two pennies together … and somehow they keep managing to pay their bills on time,” said Council Vice President HwaJeong Kim, who represents the North End.
Officials from the city of St. Paul, Ramsey County and the St. Paul School District gathered as the Joint Property Tax Advisory Committee Monday to discuss tax trends and give their general support to a joint levy increase, or the maximum that the total amount of property taxes can be raised.
Tax levies
Even that maximum amount remains in flux.
The St. Paul School District is still waiting to hear from the Minnesota Department of Education on what its maximum allowable levy increase can be. In addition to the regular levy, voters in the school district will see a question on their Nov. 4 ballot asking them whether to approve a special funding increase of $1,073 per pupil for 10 years, beginning with taxes payable in 2026.
If approved, the result will cost the owner of a St. Paul home with a median value of $289,200 an estimated $309 per year, or $26 per month. The 10-year tax is subject to increase with inflation.
Buffeted by rising costs, declining enrollment and state aid that has not kept pace with inflation, the district started the year with a $51 million budget deficit and is spending down reserves and cutting into programs to close the gap.
Meanwhile, the city of St. Paul is seeking a 5.3% levy increase and Ramsey County is seeking a 9.75% increase.
How much the city, county, school district gets
Out of every dollar collected from taxpayers, about 35 cents goes to Ramsey County, 33 cents goes to the city of St. Paul and 23 cents goes to St. Paul Public Schools.
Another nine cents goes to special taxing authorities like the Metropolitan Council, rail and watershed districts.
Trends impacting property taxes
Meeting as the joint property tax committee, the city, county and school district officials examined key trends impacting property taxes on Monday.
Among them:
Hiring freezes
To save costs, Ramsey County is looking to keep 43 open positions vacant, and St. Paul plans a similar hiring freeze for most of its open positions. St. Paul Public Schools eliminated more than 140 full-time positions as part of its 2026 budget that was approved in June. Without a cash infusion, the school district faces at least $37 million in cuts next year and every year going forward.
State, federal aid
State and federal aid. School district officials have said that if state funding for public schools kept pace with inflation over the past 20 years, the schools would be receiving another $50 million annually from the state. That hasn’t been the case, and federal funding looks even more uncertain. Reduced federal funding to cover the administrative costs of social services such as SNAP food aid and Medicare means the county likely will spend more in those areas.
Shifting property values
Commercial property values in St. Paul aren’t rising as fast as residential values, and property taxes next year will reflect that trend, which is especially evident when it comes to vacant office buildings trading hands for a steal in downtown St. Paul. Overall market value growth for St. Paul properties is around 1.5%, Mitchell said. St. Paul Mayor Melvin Carter’s budget proposal includes $5 million toward converting more downtown offices to residences, among other strategies to help stabilize downtown, but Ramsey County Commissioner Mai Chong Xiong called for even deeper investments to help improve the city and county tax base and take some tax burden off homeowners.
“You know, some of the investments in the downtown area seem minor and I think it requires a broader conversation around strategy for all of us at the table,” Xiong said, “because if we don’t expand that commercial base … (taxes) will continue to increase for residents. We just see the sheer makeup of our taxable market, and the majority of it is residents.”
Fewer child births
Committee members expressed concern about declining school district enrollment. Given demographic trends, the school district could enroll 5,000 to 10,000 fewer children in the next 10 to 15 years due to low child births alone. That in turn would add to financial stress for the district, which receives state funding per pupil. The shortfall could be passed along to property owners, who would be asked to pick up the slack through higher property taxes.
Tax-exempt land
Officials on Monday said there needs to be more discussion about how to grow the city and county’s tax base while recouping funds from non-taxable properties, which still rely on costly public services such as police and fire. About 14% of Ramsey County properties are off the tax rolls, and many of those properties are in St. Paul. That includes government buildings pertaining to the state, federal, city, county and school district, among other government jurisdictions, as well as parklands, hospitals, universities, museums and other major nonprofits.
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