It’s not uncommon for us to hear some form of the following “observation/allegation” each year when property owners receive their annual property tax statements:
“I know a guy who knows a guy who has a house in Woodbury (or Burnsville or Bloomington or Shoreview, etc.) with the exact same valuation as my house here in Eden Prairie and his taxes are half what I pay here. Why is that?”
It’s a hard question to answer, on so many levels. The easiest answer that we try not to give reflexively is that the observation/allegation is not accurate/true. Our local property tax system in Minnesota is too complicated for this to happen very often. Just think of Eden Prairie for a moment. Everyone who lives in Eden Prairie lives in one city and one county, but there are three public school districts and three watershed districts that tax property in Eden Prairie. While the most common property tax combination of taxing bodies in our city (City of Eden Prairie, Hennepin County, Eden Prairie School District and Riley-Purgatory-Bluff Creek Watershed District) covers 90% of our residential taxpayers, there are other combinations of property tax rates in our city that complicate our ability to explain to residents how their taxes change from year to year. For example, the property tax bill for a $300,000 home in the Hopkins School District and Nine Mile Watershed District is different than the property tax bill of the $300,000 home in the Minnetonka School District and the Riley-Purgatory-Bluff Creek Watershed District and different still from the $300,000 home in the Eden Prairie School District and Lower Minnesota River Watershed District.
But even though the property tax question is complicated to answer, we still try to answer it. One of the ways that we try to answer this question is to compare our financials and operations regularly to a group of 12 comparable suburban communities. This group of cities is called the Municipal Legislative Commission (MLC) Group. It includes the following cities: Maple Grove, Plymouth, Minnetonka, Eden Prairie, Edina, Bloomington, Burnsville, Apple Valley, Eagan, Lakeville, Woodbury and Shoreview.
We recently completed a ten year analysis of the municipal property tax impact to on a hypothetical $300,000 property in each of these twelve communities. For this analysis, we used only the city’s property tax impact. We also kept the value of the hypothetical home the same for each year of the analysis, which is helpful in comparing the impact over time.
Now for the results…
In the first year of our analysis, 2001, of these twelve cities Eden Prairie ranked 3rd highest in terms of its city tax impact on the $300,000 sample property. Only Apple Valley and Burnsville were higher. In 2003, Eden Prairie moved down one rank to #4. Eden Prairie moved down the chart three more spots to #7 in 2005. We stayed #7 again in 2007. In 2009, we dropped one more spot to rank #8.
Reducing our relative property tax rank among our peer cities has been a goal of the City Council since I came here in 2002. It’s been a challenge from the City Council to City staff each year. We may not have reached the lowest property tax impact among our peers, but our results are indisputable: in the space of ten years we have reduced our relative property tax ranking among our twelve peer cities from #3 to #8 – all while keeping Eden Prairie’s image and quality of life in excellent shape.
And we’re not done yet. The challenge from our Council is still there: Continue to improve the value of our property taxes while continuing to enhance Eden Prairie’s community image. It’s a tough challenge, but we’ve made great progress toward this goal over the past ten years. We’re going to continue our work on it in the next ten as well.
