To Better Understand How Property Taxes are figured… Upcoming Property Tax Meeting April 19, 2022


In March, residents across the State of Minnesota opened a surprise from their mailbox. The proposed 2023 property tax market values were sent out to landowners, which included a significant increase in values for many residents.
Property tax market values are based on the past sales of comparable or local properties in the area. In the case of the 2023 property tax market values, this data was from sales from October 1st, 2020, to September 30th, 2021. During that time, in most rural areas, land sales had jumped for various reasons, causing record amounts of sales over the asking price for the property listings.
Property values are figured using similar property sales in the same geographic area. While some properties are unique and really don’t have a comparable, most value adjustments can be supported by past sales from the area that have enough similarities to be backed by a standard appraisal.
Residents in Todd County were undoubtedly included in the landowners experiencing the property tax market value increase. The county’s property tax market values have gone up on most properties from 10% to 40%. One common concern with the 2023 proposed value notice was a bit of text near the bottom stating ‘new improvements.’ The document’s printer added this line item, but most value statements do not show an amount, meaning the new improvement part of the market value increase would have not been included in the new value for 2023 or was zero. Therefore, this confusing line item will be stated differently on future proposed market value statements.
The biggest concern shared online and across Todd County lunch tables was how much this will cost landowners. “If my value doubles, will I have to pay twice the taxes?” was a question posed by many residents. While there is a connection between property value increases and tax increases, it doesn’t automatically mean you will pay double.
Most residents are paying into three main places with their property taxes. 1. is your local government (city/township), 2. your local school district, and 3. your county. Each of these three meets and sets its budget about a year in advance based on what they need for revenue for the upcoming year. Then, they take that number to be levied against the value of all taxable properties in the jurisdiction. Once those three main levies are set, each landowner in the county will have ‘their share’ of the levies based on the property owners’ value as a percent of the total value of the taxable properties in the county.
So, to look at this for the 2023 values: If EVERYONE has their value go up a similar amount, you really won’t see much, if any, increase in your final tax bill.
To give an example:
Let’s say there are 100 properties in our Example County. Ninety-nine properties are valued at $1, and one is valued at $99. That means that the total value of the properties in Example County is $198. If Example County, Example County School, and Example City all set a levy of $333.33 for the year, our total levy from these three would be $1000. That amount would need to be raised via property taxes on our 100 properties. Since 99 are the same value, and one is much higher, the higher property would end up with the most taxes as that property represents 1/2 of the tax base. In this case, the highest value property would see $500 in property tax going toward those three levies, while the other 99 properties would pay $5 in taxes per property.
Now, to put this into what residents might see in 2023: take the same Example County above and bump all values by ten times the value. The 99 properties are now valued at $10 each, and the one is valued at $990. The total value of tall properties in Example County is now $1980. Yet, if the city/township, school, and Example County do not change their levy amount, each property owner will be paying the same amount from the year before. The value increase was across the board so that no one would see a higher percentage of the total Example County property value than in the prior tax year.
There will be a public meeting to discuss what the increased property values mean to residents of Todd County on Tuesday, April 19th, at 10:00 a.m. The meeting has been moved from the regular space to the Todd County Expo Building (at the fairgrounds) to accommodate a larger crowd expected for this meeting.