On December 6, the City Council approved the 2022 property tax levy of $68.3 million—a 2.75 percent increase over 2021. The levy will fund 68% of the City’s 2022 general fund budget. Most property taxes support core public safety services, including police and fire, and other essential core services, such as public works. For every dollar of City taxes paid, 48% goes toward police and fire, and 27% goes toward public works. See graph above.
“The vast majority of new spending is a major investment in public safety,” City Manager Jamie Verbrugge said. “The property tax levy is increasing about $1.8 million over 2021. The property tax-supported, new staffing costs for fire and police are just under 75% of that amount or $1.15 million.”
At 2.75%, Bloomington’s levy increase is the lowest among 15 peer cities. The average 2022 preliminary tax levy increase for 15 similar metro-area cities is around 6%. See graph left.
In Minnesota, local governments set a total property tax dollar amount instead of a tax rate as is done in some other states. Following state law, this is prorated to each property based on its value. With this property tax levy, the City’s share of 2022 total residential property taxes is 30 cents out of every tax dollar paid. The remaining amount goes to the county, school district and other taxing districts.
Even though the City’s tax levy increased by only 2.75%, many residents in Bloomington are seeing an increase in their overall property taxes between 5 and 15%. The increase for 2022 property taxes is due to a significant shift in the amount of taxes paid by commercial properties to residential properties. This is because the strong demand in the housing market has increased the values of many homes in Bloomington, while commercial properties saw a decrease in value due to the pandemic. Not surprisingly, the lodging and retail sectors were especially hard hit in Bloomington.
From 2021 to 2022, the median-valued home increased from $286,400 to $307,200, a growth of 7.3%. This increase in valuation means that the monthly cost of tax-supported services for the owner of a $307,200 median-valued home is $101.28 for 2022, an increase from the 2021 monthly cost of $91.06.
“These annual budget discussions are clearly the most important discussions we have as a City,” Mayor Tim Busse said. “I can say without hesitation that the City staff and the City Council take very seriously the responsibility we have regarding taxing decisions and how taxpayer money is spent.”