What's Driving Property Tax Increases

Before I jump into this week’s discussion – happy Thanksgiving! I really hope you can take time off to enjoy family and loved ones. Before the year ends, join us for some holiday cheer! Don’t miss Holiday Chamber Connect on Tuesday, Dec. 9, and the Young Professionals Holiday Party on Thursday, Dec. 11. We look forward to seeing you!
 
You would have seen the headlines last week: Minnesota property taxes statewide may go up close to $1 billion next year. Preliminary data from the state Department of Revenue shows statewide levies could reach $14.6 billion next in 2026, a 6.9% increase over 2025. 
 
While these numbers represent maximum preliminary levies, they set the stage for final budgets by end of year. Historically, final increases come in lower than initial estimates – but the trend is clear: property taxes have been rising throughout the 2020s as inflation and costs shifts squeeze local budgets. 
 
Recent Statewide Levy Increases
• 2025 — 5.6% or $718.6 million.
• 2024 — 6.4% or $775 million.
• 2023 — 5.4% or $626 million.
• 2022 — 3.9% or $431 million.
• 2021 — 2.1% or $226 million.
• 2020 — 4.6% or $501 million.
 
Ramsey County: Why Taxes are Rising
I talked with Ramsey County Manager Ling Becker: “We appreciate your partnership as we continue to navigate a challenging 2026 budget and the difficult forecasts driven by impending federal and state cost shifts. The National Association of Counties (NACo) estimates that we are up against a $1 Trillion shift from the federal government to local governments. As we discussed in September, counties have very limited financial tools and remain overly dependent on a regressive property tax system. Combined with the fact that nearly 14% of our county’s property is tax-exempt [more than any other metro county], these constraints place significant pressure on our long-term fiscal stability.”
 
Key facts about Ramsey County’s budget:

• 46% funded by property taxes; the rest from state, federal, and other sources.
• Levy increases: 4.75% (2025), 6.8% (2024), 4.5% (2023).
• Major priorities to grow the tax base: Rice Creek Commons, RiversEdge.

 
What’s Driving the Increase?
Several factors are pushing Ramsey County’s levy higher:

• 14% of property is tax-exempt (highest in metro).
• 47% of downtown tax-exempt (Capitol complex).
• State aid formula caps for counties over 500K residents.
• Unfunded mandates and cost shifts for human services (SNAP, Medicaid).
• Rising employee compensation and core service needs (public safety, health).
• More tax burden shifted to residential properties due to decreasing apartment, commercial/industrial values. 

 
The County Board approved a maximum levy increase of 9.75% ($38.6M), though efforts continue to reduce that before final adoption on Dec. 16.
 
How Ramsey Compares Across the Metro
Ramsey County’s proposed increase is in line with regional trends. Metro counties are generally adopting upper single-digit to low double-digit levy hikes as costs rise statewide.
 
What It Means for Property Owners
Most Ramsey County property owners will see higher taxes in 2026 due to:

1. Assessment Year 2025 Value Increases
   • Overall values: +3.0%
   • Residential values: +4.76%
2. Levy Increases (TNT notices)
   • Ramsey County: +9.75%
   • City/Town: +7.26%
   • School District: +0.13% (impacts from school referendums are not included in the TNT statements)
   • Special Districts: +1.99%

Residential Trends:

• Median increase: +6.65% ($298)
• 11.5% see no change; 59% see 0–10% increase.

​For your reference, here are the maximum levies for the surrounding metropolitan counties.

For more information, please visit the following links: 
https://www.revenue.state.mn.us/property-tax-refund
https://www.revenue.state.mn.us/property-tax-deferral-senior-citizens
https://www.revenue.state.mn.us/homestead
 
See you in the trenches,
B