ST. PETER — St. Peter’s property tax rate will decrease in 2021 for the first time in six years, after the City Council set its preliminary levy Monday.
The city’s property tax rate will be at most 51.53 in 2021, down from 51.58 in 2020. The last time the city’s tax rate dropped was in 2015.
A lower rate means residents whose home values remain the same will pay slightly less in property taxes next year.
It won’t be a huge drop, said Finance Director Sally Vogel, but it’s “not an increase so that’s good.”
“We’ll see a slight decrease in property taxes,” she said. “Not much, but it’s basically staying flat year over year.”
With the city’s estimated market value on homes on track to rise by 3.3%, many homeowners would still pay more than in 2020 despite the rate decreasing. Nicollet County will finalize market values closer to December.
Based on city projections, a resident whose $150,000 home rose in value by 2.5% in 2021 would pay $20.43 more in taxes. A $250,000 commercial property rising in value by 2.5% would result in a $62.29 property tax increase.
For residents whose property values remained the same, a $150,000 home would equal 63 cents less in taxes compared to 2020. A $250,000 commercial property’s value staying level would lead to $2.13 less in taxes.
Mayor Chuck Zieman made clear the rate is just for residents’ city portion of taxes. County and school tax rates weren’t known yet, he said, so the city wouldn’t yet know if people’s tax rates will go down overall.
The city’s gross levy is projected to increase by 3.16%, or $102,230 in 2021. General fund expenditures will increase by $113,525, with Vogel saying expenditures on salaries and insurance increased the most.
She noted the city’s general fund will be operating at a slight loss. Projected revenues total about $8.34 million, compared to nearly $8.44 million in expenditures.
The difference isn’t a good or bad thing, Vogel said, and the city will use reserve funds as needed.
Council budget documents also stated the city has had to rely more on property taxes over the last 11 years due to state funding changes. State local government aid will increase by $52,973 in 2021, but the rise doesn’t cover inflation-related increases from 2020 to 2021 based on the city’s estimates.
The Council will approve the city’s final levy before the end of the year. Property tax rates can’t go up once a city council approves a preliminary levy.