Several residents urged the Hubbard County Board to cut expenses at the Dec. 3 truth in taxation hearing.
County commissioners will continue to fine-tune the 2020 budget over the next few weeks. The final levy will be set at their Dec. 17 meeting.
Jeff Gast owns property on Third Crow Wing Lake. A real estate appraiser, he said the valuation of his property jumped from $184,200 to $219,500. Taxes rose from $1,520 to $1,852 – a 22 percent increase.
Gast said he’s owned the property for six-and-a-half years. During that time, taxes rose an average of 13 percent per year, he continued.
“There’s something going awry, maybe in my township or a couple townships,” he said, mentioning two other friends whose assessed market values were about $25,000 above the recent purchase price.
Gast said he works in five counties, two of them in Minnesota. “In the last two years, all the markets I cover have been stable. They’re not increasing. They’re not decreasing. For whatever reason, valuations in Hubbard County are going through the roof. This is concerning. I can’t sustain a 13 percent increase in taxes every year. … Most people aren’t making that kind of money,” he said.
Steven Lindeman owns a home in Todd Township. The home lacks electricity, heat, water and sewer, he said, yet the property was valued at $37,000.
“There’s no way in the world I get ever get $37,000 for it,” he said.
Noting he owns several properties which all saw tax increases, Lindeman said, “C’mon, guys. I don’t know why your expenses are that much greater than ours. The general public has to come up with that extra 10, 13, 20 percent. You’ve got to slow it down somewhere. It’s absolutely ridiculous. You can’t expect the average person in Hubbard County to keep up with these taxes every year. … Whose wages in this area have gone up 20 percent in the last three years? You can’t continue to tax, tax, tax and expect us to maintain it.”
The board urged both landowners to discuss their concerns with Hubbard County Assessor Ginger Woodrum.
Hubbard County Coordinator Eric Nerness said the board is diligently looking at ways to cut costs.
In September, the Hubbard County Board approved a preliminary payable 2020 levy of $15,855,000. That’s an $848,000, or 5.9 percent, increase over the 2019 final levy of $15,007,000.
The preliminary 2020 budget breaks down as follows:
General fund revenue is projected at $16,070,186 with $16,064,888 in expenses.
Road and bridge revenue is $11,617,900 with $11,747,780 in expenses.
Social services revenue is $7,414,068 with $8,547,071 in expenses.
Solid waste revenue is $3,795,500 with $3,807,913 in expenses.
Tax-forfeited land revenue is $2,154,120 with $2,323,476 in expenses.
The county’s total revenue is $41,042,774, an increase of 5.5 percent over 2019. Total expenses are $42,491,128 – a 4.2 percent increase. Expenditures exceed revenue by $1,448,354.
Hubbard County Auditor/Treasurer Kay Rave said overall general fund expenditures increased $286,366, or 1.8 percent, compared to last year. She attributed salary and wage increases as the main contributing factor, including new county positions and a 2.75 percent cost of living increase. The county also expanded and upgraded technology services to taxpayers, she said.
Tax capacity rates
Rave provided a chart of tax capacity rates for each township, school district and city, plus countywide.
The tax capacity rate is determined annually by the county auditor. This rate is a result of the property tax levy submitted by the taxing authority (school district, county, city, township, etc.) being divided by the overall total tax capacity value for that jurisdiction.
Tax capacity value is determined by multiplying the taxable market value of the property by the statutory percentage rates (also called class rates) for the specific classification/use on the property. Minnesota has many class rates and those rates can be changed only by the state Legislature.
Rave noted that many township tax capacity rates decreased when compared to 2019, but nine increased. The largest increases were seen in Akeley (1.177 percent), Farden (2.276 percent) and White Oak townships (2.194 percent).
The most significant decreases were in Fern (-1.190 percent), Guthrie (-1.051 percent), Hart Lake (-1.077 percent), Helga (-1.935 percent) and Nevis townships (-1.389 percent).
County commissioner David De La Hunt asked what affects tax capacity rates.
“The levy could have gone down, so tax capacity (value) could have gone up. Overall, throughout the county it went up about $1.6 million. Last year, it was closer to $2 million, but the year before it was only around $500,000. As our tax capacity (value) goes up, even if the levy stays the same, the rates are going to go down because of the increased capacity to tax,” Rave explained. “It’s not just the value of a home or the amount of the levy, but it’s also the tax capacity (value) in that township.”
The proposed 2020 Hubbard County rate is 42.084 percent. Neighboring county tax capacity rates were 30.643 percent in Cass, 64.158 percent in Beltrami, 33.052 percent in Crow Wing, 67.343 percent in Todd and 79.98 percent in Wadena.
Wadena County’s rate is really high, Rave explained, because they have less people and less tax capacity value. “They still have a $9 million levy, which is still pretty high. With a low tax capacity (value), you’re going to have a really high rate,” she said.
Cass County, on the other hand, has a high tax capacity value, due to the number of expensive lake homes and numerous school districts, she said. “It’s really a big county.”
Rave also compared the county’s proposed 2020 levy with other counties with similar populations: Martin ($17,362,041), Dodge ($15,045,301), Wabasha ($15,790,214), Todd ($16,499,672) and Cass ($23,298,072). According to 2015 data, all these counties have about 20,000 residents.