The typical Hopkins homeowner will pay a few more dollars in city property taxes under the 2013 budget and levy the City Council approved Tuesday.
A home that was valued at $225,000 in 2005—worth an average of $199,625 in 2012 because of declining values—would pay $1,244 in property taxes for 2013, $9 more than the same home would’ve paid a year earlier.
“An average value home should not see much increase in the city portion of property taxes,” said Finance Director Christine Harkess.
Overall, the general fund budget will grow by about $23,800 or .23 percent—from $10.56 million to $10.58 million. The tax levy —or the portion of the budget paid by local property taxes—is .49 percent bigger.
Click on the PDF to the right to see the budget in greater detail.
Both the final budget and levy are smaller than originally expected. On Aug. 14, city staff proposed a 1.26 percent budget increase, a figure that dropped to a .71 percent increase by Sept. 4. Throughout the process, the city council encouraged staff to keep the increase as flat as possible.
The closure of the city’s dispatch center and transition to Hennepin County dispatch helped with the cost savings. Harkess estimated that will save $332,887 next year compared to what the city would have had to pay if it had maintained its own dispatch center.
Savings like that were offset by increases, though. Three police officers who were on military duty for much of 2012 will be back for 2013, adding their salaries back onto the payroll. The city has also budgeted for wage increases.
Hopkins will also lose much more to “fiscal disparities,” a program that seeks to spread the benefits of development across the Twin Cities metro. Where it was once a net beneficiary, development projects that have boosted its tax capacity have turned it into a net contributor. In 2013, it’s expected to contribute more than $800,000 over what it takes in.
“We are a significant contributor to the fiscal disparities pool, and that does impact the tax rate,” Harkess said.
Two residents at the budget hearing questioned whether the city was really doing all it could to keep taxes low. One of those men, Mark Jensen, said he pays about 1.8 percent of his home’s value in property taxes and that real estate agents have told him that more than other surrounding communities. He wants to sell his home in the next few years and worries he’ll have to lower his asking price to compensate for the tax bill.
2013 City Property Taxes2005 Home Value 2012 Home Value Property Taxes Increase over 2012 Percent increase $150,000 $133,083 $829 $6 .7 % $225,000 $199,625 $1,244 $9 .7 % $350,000 $310,528 $1,935 $13 .7 % $500,000 $443,612 $2,765 $19 .7 %